Problem 11-22A (Algo) Effect of business structure on financial statements LO 11-1

Cascade Company was started on January 1, Year 1, when it acquired $156,000 cash from the owners. During Year 2, the company earned cash revenues of $81,500 and incurred cash expenses of $62,200. The company also paid cash distributions of $13,500. 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.)

Assume Cascade is a partnership with two partners, Carl Cascade and Beth Cascade. Carl Cascade invested $46,800 and Beth Cascade invested $109,200 of the $156,000 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 70 percent of the profits and Carl to get the remaining 30 percent. With regard to the $13,500 distribution, Beth withdrew $4,050 from the business and Carl withdrew $9,450.

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CASCADE COMPANY
Income Statement
For the Year Ended December 31, Year 1
	$0

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CASCADE COMPANY
Capital Statement
For the Year Ended December 31, Year 1
	$0

CASCADE COMPANY
Balance Sheet
As of December 31, Year 1
Assets
Total Assets		$0
Liabilities
Equity
Total liabilities and equity		$0

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		$0
Cash flows from investing activities
Cash flows from financing activities:
Net cash flow from financing activities		0
Net change in cash		0
Ending cash balance		$0