required information the following information applies to the questions displayed below. cascade company was…

required information the following information applies to the questions displayed below. cascade company was started on january 1, year 1, when it acquired $158,000 cash from the owners. during year 1, the company earned cash revenues of $85,600 and incurred cash expenses of $62,200. the company also paid cash distributions of $9,500. 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.) a. cascade is a sole proprietorship owned by carl cascade. complete this question by entering your answers in the tabs below. income statement statement of changes balance sheet statement of cash flows prepare a capital statement (statement of changes in equity) for year 1. note: deductions should be indicated by a minus sign.

required information the following information applies to the questions displayed below. cascade company was started on january 1, year 1, when it acquired $158,000 cash from the owners. during year 1, the company earned cash revenues of $85,600 and incurred cash expenses of $62,200. the company also paid cash distributions of $9,500. 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.) a. cascade is a sole proprietorship owned by carl cascade. complete this question by entering your answers in the tabs below. income statement statement of changes balance sheet statement of cash flows prepare a capital statement (statement of changes in equity) for year 1. note: deductions should be indicated by a minus sign.

Answer

Explanation:

Step1: Calculate net income for income statement

Net income = Cash revenues - Cash expenses Net income = $85,600 - $62,200 = $23,400

Step2: Prepare income statement

Income Statement Amount
Revenues $85,600
Expenses $62,200
Net Income $23,400

Step3: Calculate ending capital for statement of changes in equity

Beginning capital = $158,000 Add: Net income = $23,400 Less: Cash distributions = $9,500 Ending capital = $158,000 + $23,400 - $9,500 = $171,900

Step4: Prepare statement of changes in equity

Statement of Changes in Equity Amount
Beginning Capital $158,000
Add: Net Income $23,400
Less: Cash Distributions -$9,500
Ending Capital $171,900

Step5: Prepare balance sheet

Balance Sheet Amount
Assets - Cash $171,900
Liabilities $0
Owner's Equity - Carl Cascade, Capital $171,900

Step6: Prepare statement of cash flows

Statement of Cash Flows Amount
Cash flows from operating activities:
Cash receipts from revenues $85,600
Cash payments for expenses -$62,200
Net cash from operating activities $23,400
Cash flows from financing activities:
Cash received from owner $158,000
Cash distributed to owner -$9,500
Net cash from financing activities $148,500
Net increase in cash $171,900
Beginning cash balance $0
Ending cash balance $171,900

Answer:

Income Statement:

Income Statement Amount
Revenues $85,600
Expenses $62,200
Net Income $23,400
Statement of Changes in Equity:
Statement of Changes in Equity Amount
---- ----
Beginning Capital $158,000
Add: Net Income $23,400
Less: Cash Distributions -$9,500
Ending Capital $171,900
Balance Sheet:
Balance Sheet Amount
---- ----
Assets - Cash $171,900
Liabilities $0
Owner's Equity - Carl Cascade, Capital $171,900
Statement of Cash Flows:
Statement of Cash Flows Amount
---- ----
Cash flows from operating activities:
Cash receipts from revenues $85,600
Cash payments for expenses -$62,200
Net cash from operating activities $23,400
Cash flows from financing activities:
Cash received from owner $158,000
Cash distributed to owner -$9,500
Net cash from financing activities $148,500
Net increase in cash $171,900
Beginning cash balance $0
Ending cash balance $171,900