Answer:
the income statement is the same for all types of businesses:
Revenues $35,000
Expenses <u> ($18,100)</u>
Net income $16,900
a. Cascade is a sole proprietorship owned by Carl Cascade.
<u>statement of equity</u>
Carl Cascade, capital beginning balance $0
paid in capital, Carl Cascade $60,000
net income <u> $16,900</u>
subtotal $76,900
Carl Cascade, drawings <u> (4,000)</u>
Carl Cascade, capital ending balance $72,900
<u>balance sheet</u>
Assets
Cash $72,900
Equity
Carl Cascade, capital $72,900
<u>statement of cash flows</u>
Cash flow from operating activities $16,900
Cash flow from financing activities:
Paid in capital $60,000
Drawings <u> ($4,000)</u>
net cash from financing activities $56,000
net cash increase $72,900
beginning cash balance <u> $0</u>
ending cash balance $72,900
b. Cascade is a partnership with two partners, Carl Cascade and Beth Cascade.
<u>statement of equity</u>
Carl Cascade, capital beginning balance $0
Beth Cascade, capital beginning balance $0
paid in capital, Carl Cascade $24,000
paid in capital, Beth Cascade $36,000
net income <u> $16,900</u>
subtotal $76,900
Carl Cascade, drawings <u> (1,600)</u>
Beth Cascade, drawings <u> (2,400)</u>
Carl Cascade, capital ending balance $29,160
Beth Cascade, capital ending balance $43,740
<u>balance sheet</u>
Assets
Cash $72,900
Equity
Carl Cascade $29,160
Beth Cascade $43,740
total equity $72,900
<u>statement of cash flows</u>
Cash flow from operating activities $16,900
Cash flow from financing activities:
Paid in capital $60,000
Drawings <u> ($4,000)</u>
net cash from financing activities $56,000
net cash increase $72,900
beginning cash balance <u> $0</u>
ending cash balance $72,900
c. Cascade is a corporation.
<u>statement of equity</u>
Common stock beginning balance $0
Common stock issued (5,000 stocks) $25,000
Additional paid in capital $35,000
net income <u> $16,900</u>
subtotal $76,900
Dividends <u> (4,000)</u>
Common stock ending balance $25,000
Additional paid in capital ending balance $35,000
Retained earnings $12,900
<u>balance sheet</u>
Assets
Cash $72,900
Equity
Common stock $25,000
Additional paid in capital $35,000
Retained earnings $12,900
total equity $72,900
<u>statement of cash flows</u>
Cash flow from operating activities $16,900
Cash flow from financing activities:
Common stocks issued $25,000
Additional paid in capital $35,000
Dividends <u> ($4,000)</u>
net cash from financing activities $56,000
net cash increase $72,900
beginning cash balance <u> $0</u>
ending cash balance $72,900
