Question

8-20 Effect of business structure on financial statements LO 8-1 d on January 1, 2018, when it acquired $60,000 cash from the owners. and in CHECK FIGURES a. Net Income: $16,900 b. Cascade Capital: $72,900 During The company also paid cash distributions of $4.000. nuine 2018, the company earned cash venues of S35,000 and incurred cash expenses of $18.100. Required 2018 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 eparately) Cascade is a sole proprietorship owned by Carl Cascade. h. Cascade is a partnership with two partners, Carl Cascade and Beth Cascade. Carl Cascade in- vested $24,000 and Beth Cascade invested $36,000 of the $60,000 cash that was used to start the business. Beth was expected to assume the vast majority of the responsibility for operating the business. The partnership agreement called for Beth to receive 60 percent of the profits and Carl to get the remaining 40 percent. With regard to the $4,000 distribution, Beth withdrew $2.400 from the business and Carl withdrew $1,600. c Cscade is a corporation. It issued 5,000 shares of $5 par common stock for $60.000 cash to start the business.

Answer 1

CASCADE COMPANY

FOR THE FINANCIAL YEAR ENDED 2018

INCOME STATEMENT

REVENUE	$ 35000
EXPENSE	$ 18100
NET INCOME	$ 16900

CAPITAL STATEMENT

OPENING CAPITAL	$ 0
ADD: CAPITAL INVESTED FROM OWNER	$ 60000
ADD: NET INCOME	$ 16900
LESS: WITHDRAWALS	$ 4000
CLOSING CAPITAL BALANCE	$ 72900

BALANCE SHEET, 2018

ASSETS
CASH	$ 72900
TOTAL ASSETS	$ 72900
LIABILITIES
LIABILITIES	$ 0
EQUITY SHARE CAPITAL	$ 72900
TOTAL LIABILITIES	$ 72900

STATEMENT OF CASH FLOWS ,

FOR THE YEAR ENDED 31ST DECEMBER , 2018

CASH FLOW FROM OPERATING ACTIVITIES
RECEIPTS	$ 35000
EXPENSE PAID	$ 18,100
NET CASH FLOW FROM OPERATING ACTIVITIES	$ 16900
CASH FLOW FROM INVESTING ACTIVITIES	$ 0
CASH FLOW FROM FINANCING ACTIVITIES
INVESTMENTS FORM OWNER	$ 60000
LESS: DRAWINGS	$ 4000
NET CASHFLOW FROM FINANCING ACTIVITIES	$ 56000
NET CHANGE IN CASH	$ 72900
ADD: OPENING CASH BALANCE	$ 0
CLOSING CASH BALANCE	$ 72900