Auto Spa Company was started on January 1, 2014, when the owners invested $157,0

Question

Auto Spa Company was started on January 1, 2014, when the owners invested $157,000 cash in the business. During 2014, the company earned cash revenues of $95,700 and incurred cash expenses of $70,000. The company also paid cash distributions of $12,000.

Prepare a 2014 income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows using each of the following assumptions. (Consider each assumption separately.)

Prepare a 2014 income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows using each of the following assumptions. (Consider each assumption separately.)

Explanation / Answer

Income Statement Particulars Amount Cash revenues                   95,700.00 Cash Expenses                   70,000.00 Cash Income                   25,700.00 Capital Statement Particulars Amount Investment                 157,000.00 Income                   25,700.00 Distributions                 (12,000.00) Closing Balance in Capital                 170,700.00 Balance Sheet Liabilities Amount Assets Amount Capital                 170,700.00 Cash and other assets = 15700 +25700 -12000                      170,700.00                 170,700.00                      170,700.00 Assumptions arenot given for Cash flows thus I cannot answer it

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