Cascade Company was started on January 1, 2018, when it acquired $159,000 cash from the owners. During 2018, the company earned cash revenues of $89,600 and incurred cash expenses of $68,600. The company also paid cash distributions of $8,500.

Required

Prepare a 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 separately.)

Cascade is a partnership with two partners, Carl Cascade and Beth Cascade. Carl Cascade invested $103,350 and Beth Cascade invested $55,650 of the $159,000 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 $8,500 distribution, Beth withdrew $2,550 from the business and Carl withdrew $5,950.