Cascade Company was started on January 1, Year 1, when it acquired $160,000 cash from the owners. During Year 1, the company earned cash revenues of $90,100 and incurred cash expenses of $62,700. The company also paid cash distributions of $5,500.

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.)

Problem 8-20A (Algo) Part b

2. Cascade is a partnership with two partners, Carl Cascade and Beth Cascade. Carl Cascade invested $56,000 and Beth Cascade invested $104,000 of the $160,000 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 65 percent of the profits and Carl to get the remaining 35 percent. With regard to the $5,500 distribution, Beth withdrew $3,575 from the business and Carl withdrew $1,925.

a. Prepare a income statement for Year 1.

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

b.

Prepar a capital statement for Year 1. (Deductions should be indicated by a minus sign.)

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

c.

Prepare a balance sheet for Year 1.

CASCADE COMPANY
Balance Sheet
As of December 31, Year 1
Assets
Total Assets
Liabilities
Equity
Total liabilities and equity

d. Prepare a statment of cash flows for Year 1. (Cash outflows should be indicated with a minus sign.)

CASCADE COMPANY
Statement of Cash Flows
For the Year Ended December 31, Year 1
Cash flows 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