Question

Cascade Company was started on January 1, Year 1, when it acquired $152,000 cash from the owners. During Year 1, the company earned cash revenues of $80,700 and incurred cash expenses of $68,400. The company also paid cash distributions of $6,500.

Required
Prepare a Year 1 income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows under each of the following assumptions. (Consider each assumption separately.)

c. Cascade is a corporation. It issued 10,000 shares of $9 par common stock for $152,000 cash to start the business. (Amounts to be deducted should be indicated with minus sign.)

	CASCADE COMPANY Income Statement For the Year Ended December 31, Year 1

	CASCADE COMPANY Statement of Changes in Stockholders’ Equity For the Year Ended December 31, Year 1 Total stockholders’ equity

	CASCADE COMPANY Balance Sheet As of December 31, Year 1 Assets Total Assets Liabilities Stockholders’ equity Total paid-in capital Total liabilities and Stockholders’ equity

	CASCADE COMPANY Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flow from operating activities: Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities: Net cash flow from financing activities Net change in cash Ending cash balance

Answer 1

Answer :-

Income statement for Year 1:

Description	Amount
Revenues	$80,700
Less: Expenses	($68,400)
Net income	$12,300

Statement of changes in equity:

Description	Amount
Beginning common stock (10,000 * $9)	$90,000
Add: Paid in capital in excess of par($152,000-$90,000)	$62,000
Add: Net income	$12,300
Less: Dividends paid	- $6,500
Ending stockholder's equity	$157,800

Statement of cash flows:

Description	Amount	Amount
Operating activities:
Net income	$12,300
Net cash flows from operating activities		$12,300
Investing activities:
Net cash flows from investing activities		$0
Financing activities:
Dividends paid	-$6,500
Common stock issued	$90,000
Proceeds from paid in capital in excess of par	$62,000
Net cash flows from financing activities		$145,500
Net increase in cash		$157,800
Beginning cash balance		$0
Ending cash balance		$157,800

Balance sheet:

Description	Amount
Assets:
Cash	$157,800
Total assets	$157,800
Liabilities & stockholder's equity:
Stockholder's equity	$157,800
Total liabilities & stockholder's equity	$157,800