60.1K

Verified Solution

Link Copied!

1-34A (Algo) Interrelationships among financial statements LO 1-5, 1-7, 1-8, 1-9 Prat Corp. started the Year 2 accounting period with $37,000 of assets (all cash), $15,500 of liabilities, and $12,000 of common stock. During the year, the Retained Earnings account increased by $14,550. The bookkeeper reported that Prat paid cash expenses of $29,500 and paid a $2,700 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 $10,000 cash to reduce the liability owed to the bank, and the business acquired $8,500 of additional cash from the issue of common stock. Required 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. (Hint Determine the amount of beginning retained earnings before considering the effects of the current period events. It also might help to record all events under an accounting equation before preparing the statements.) b. Determine the percentage of total assets that were provided by creditors, investors, and earnings. c. Determine the balance in the revenue, expense, and dividends accounts as of January 1, Year 3. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req A3 Req A4 Req B Req C Prepare a period-end balance sheet for the Year 2 accounting period. Prat Corp. Balance Sheet As of December 31, Year 2 Assets Notes receivable Total assets Liabilities Stockholders' Equity Retained earnings 24,050 Common stock 20,500 Total stockholders' equity. Total liabilities and stockholders' equity $ 0 $ 5,500 44,550 $ 50,050 Prat Corp. Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Cash receipts from revenue Cash payments for expenses Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities: Cash dividend to stockholders Cash payments to creditors $ 0 0 Cash receipts from stock issue 8,500 Net cash flow from financing activities 8,500 Net increase in cash 13,050 Plus: Beginning cash balance 37,000 Ending cash balance $ 50,050 Req A1 Req A2 Req A3 Req A4 Req B Req C Determine the percentage of total assets that were provided by creditors, investors, and earnings. (Round your answers to 2 decimal places.) Total Assets Creditors 10.98 % Investors % Earnings L %

Answer & Explanation Solved by verified expert

See Answer