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Prat Corp. started the Year 2 accounting period with $30,000 of assets (all cash), $12,000 of liabilities, and $13,000 of common stock. During the year, the Retained Earnings account increased by $7,550. The bookkeeper reported that Prat paid cash expenses of $26,000 and paid a $2,000 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 $3,000 cash to reduce the liability owed to the bank, and the business acquired $4,000 of additional cash from the issue of common stock.

Required

1. a-1. Prepare an income statement for the Year 2 accounting period.
2. a-2. Prepare a statement of changes in stockholders equity for the Year 2 accounting period.
3. a-3. Prepare a period-end balance sheet for the Year 2 accounting period.
4. a-4. Prepare a statement of cash flows for the Year 2 accounting period.
5. (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.)
6. b. Determine the percentage of total assets that were provided by creditors, investors, and earnings.
7. 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 Reg A2 Req A3 Req A4 Req B Reg C Prepare an income statement for the Year 2 accounting period. Prat Corp. Income Statement For the Year Ended December 31, Year 2 Revenues $ 35,550 Expenses 26,000 Net income $ 9,550 Req A1 Req A2 > Complete this question by entering your answers in the tabs below. Req A1 Reg A2 Reg A3 Req A4 Req B Reqc Prepare a statement of changes in stockholders' equity for the Year 2 accounting period. Prat Corp. Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Beginning common stock $ 13,000 Plus: Common stock issued 4,000 Ending common stock $ Beginning retained earnings $ 5,000 Plus: Net income 9,550 Less: Dividend 2,000 Ending retained earnings Total stockholders' equity $ 17,000 12,550 29,550 Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Req A3 Req A4 Reg B Reqc Prepare a period-end balance sheet for the Year 2 accounting period. Prat Corp. Balance Sheet As of December 31, Year 2 Assets Cash $ 38,550 Total assets $ 38,550 Liabilities $ 9,000 Stockholders' Equity Common stock Retained earnings 17,000 12,550 Total stockholders' equity Total liabilities and stockholders' equity 29,550 38,550 $ required. Costi OULITOWS ould be indicated with a minus sign.) Prat Corp. Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Cash receipts from revenue $ 35,550 Cash payments for expenses (26,000) $ 9,550 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities: Cash payments to creditors Cash dividend to stockholders Cash receipts from stock issue $ (3,000) (2,000) 4,000 Net cash flow from financing activities Net increase in cash Plus: Beginning cash balance Ending cash balance (1,000) 8,550 30,000 38,550 $ Req A1 Reg A2 Req A3 Req A4 Req B Reqc Determine the percentage of total assets that were provided by creditors, investors, and earnings. (Round your answers to 2 decimal places.) Total Assets Creditors % Investors % Earnings % Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req A3 Req A4 Req B Reqc Determine the balance in the revenue, expense, and dividends accounts as of January 1, Year 3. January 1, Year 3 Revenue accounts balance Expense accounts balance Dividends account balance

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