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 $86,800 and incurred cash expenses of $69,900. The company also paid cash distributions of $10,500. 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.)

The statements required have been prepared below

Explanation:

The income statement extract:

Revenue                  $86,800

Cash expenses      ($69,900)

Net income              $16,900

Statement of changes in equity extract:

                      Retained Earnings       Capital           Total

                                   $                           $                   $

Bal b/f                          nil                         nil               nil

paid in capital                                         159,000      159,000

net income                16,900                         -               16,900

Dividends                  (10,500)                      -                (10,500)

Balance c/f                  6,400                     159,000      165,400    

Balance sheet extract  

Assets

Cash (159000+86800-69900-10500)                           165,400

Total assets                                                                      165400

Shareholders' equity

Share capital                                                                     159,000

Retained earnings                                                                6,400

Total shareholders' fund                                                   165,400

Cash flow extract:

operating cash  flow

Net income                                                                         16,900

financing activities

share capital                                                                       159,000  

dividends                                                                            (10,500)

Increase in cash and cash equivalent in the year             165,400  

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