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Prat Corp started the Year 2 accounting period with $34,000 of assets (all cash), $14,000 of liabilities, and $9,000 of common stock. During the year, the Retained Earnings account increased by $11,550. The bookkeeper reported that Prat paid cash expenses of $28,000 and paid $2,400 cash dividend to the stockholders, but she could not find a record of the amount of cash that Prat received for performing services. Prat also paid $7,000 cash to reduce the liability owed to the bank, and the business acquired $7,700 of additional cash from the issue of common stock. a-1 Prepare an income statement for the year 2 accounting period a-2 Prepare a statement of changes in stockholders' equity for the year 2 accounting period a-3 prepare a period-end balance sheet for the year 2 accounting period a-4 prepare a statement of cash flows for the year 2 accounting period b) determine the percentage of total assets that were provided by creditors, investors, and earnings c) determine the balance in revenue, expense, and dividends accounts as of January 1, Year 3

Prat Corp started the Year 2 accounting period with $34,000 of assets (all cash), $14,000 of liabilities, and $9,000 of common stock. During the year, the Retained Earnings account increased by $11,550. The bookkeeper reported that Prat paid cash expenses of $28,000 and paid $2,400 cash dividend to the stockholders, but she could not find a record of the amount of cash that Prat received for performing services. Prat also paid $7,000 cash to reduce the liability owed to the bank, and the business acquired $7,700 of additional cash from the issue of common stock. a-1 Prepare an income statement for the year 2 accounting period a-2 Prepare a statement of changes in stockholders' equity for the year 2 accounting period a-3 prepare a period-end balance sheet for the year 2 accounting period a-4 prepare a statement of cash flows for the year 2 accounting period b) determine the percentage of total assets that were provided by creditors, investors, and earnings c) determine the balance in revenue, expense, and dividends accounts as of January 1, Year 3

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prat Corp started the Year 2 accounting period with $34,000 of assets (all cash), $14,000 of liabilities, and $9,000 of common stock. During the year, the Retained Earnings account increased by $11,550. The bookkeeper reported that Prat paid cash expenses of $28,000 and paid $2,400 cash dividend to the stockholders, but she could not find a record of the amount of cash that Prat received for performing services. Prat also paid $7,000 cash to reduce the liability owed to the bank, and the business acquired $7,700 of additional cash from the issue of common stock. a-1 Prepare an income statement for the year 2 accounting period a-2 Prepare a statement of changes in stockholders' equity for the year 2 accounting period a-3 prepare a period-end balance sheet for the year 2 accounting period a-4 prepare a statement of cash flows for the year 2 accounting period b) determine the percentage of total assets that were provided by creditors, investors, and earnings c) determine the balance in revenue, expense, and dividends accounts as of January 1, Year 3
Transcribed Image Text:Prat Corp started the Year 2 accounting period with $34,000 of assets (all cash), $14,000 of liabilities, and $9,000 of common stock. During the year, the Retained Earnings account increased by $11,550. The bookkeeper reported that Prat paid cash expenses of $28,000 and paid $2,400 cash dividend to the stockholders, but she could not find a record of the amount of cash that Prat received for performing services. Prat also paid $7,000 cash to reduce the liability owed to the bank, and the business acquired $7,700 of additional cash from the issue of common stock. a-1 Prepare an income statement for the year 2 accounting period a-2 Prepare a statement of changes in stockholders' equity for the year 2 accounting period a-3 prepare a period-end balance sheet for the year 2 accounting period a-4 prepare a statement of cash flows for the year 2 accounting period b) determine the percentage of total assets that were provided by creditors, investors, and earnings c) determine the balance in revenue, expense, and dividends accounts as of January 1, Year 3
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