Assignment:
Upton Company was started on Jan. 1, 2011, when the owners invested $160,000 cash in the business. During 2011, the company earned cash revenues of $120,000 and incurred cash expenses of $82,000. The company also paid cash distributions of $15,000.
Required:
Prepare a 2011 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.)
1) Upton is a sole proprietor.
2) Upton is a partnership with two partners, Dan and Nancy Upton. Dan invested $100,000 and Nancy invested $60,000 of the $160,000 cash that was used to start the business. Nancy was expected to assume the vast majority of the responsibility for operating the business. The partnership agreement called for Nancy to receive 60 percent of the profits and Dan the remaining 40 percent. With regard to the $15,000 distribution, Nancy withdrew $6,000 from the business and Dan withdrew $9,000.
3) Upton is a corporation. The owners were issued 10,000 shares of $10 par common stock whenthey invested the $160,000 cash in the business.