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Cascade Company was started on January 1, Year 1, when it acquired $154,000 cash from the owners. During Year 1, the company earned cash revenues of $96,400 and incurred cash expenses of $65,400. The company also paid cash distributions of $11,500.

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.)

3. Cascade is a corporation. It issued 8,000 shares of $10 par common stock for $154,000 cash to start the business.