Working backward to the balance sheet at the beginning of the period. (Problems 45 through 47 derive from problems by George H. Sorter.) The following data relate to the Prima Company.

(1) Post-closing trial balance at December 31. Year 2:

(4) Purchases of merchandise during the period, all on account, were $127,000. All 'Other Operating Expenses" were credited to Prepayments.
Prepare a balance sheet for January I , Year 2. {Hint: Set up T-accounts for each of the accounts in the trial balance, and enter the ending balances in the T-accounts.
Starting with information from the income statement and statement of cash receipts and disbursements, reconstruct the transactions that took place during the year and enter the amounts in the appropriate T-accounts.)

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Debits Cash Marketable Securities Accounts Receivable Merchandise Inventory Prepayments for Miscellaneous Services Land. Buildings, and Equipment Total Debits Credits Accounts Payable (for merchandise) Interest Payable. Taxes Payable Note Payable (6 percent, long-term Accumulated Depreciation Capital Stock Retained Eamings Total Credits (2) Income and retained earnings data for Year 2: Sales Less Expenses: Cost of Goods Sold Depreciation Expense Taxes Expense Other Operating Expense- Interest Expense Total Expenses Net Income Less Dividends Increase in Retained Earnings (3) Summary of cash receipts and disbursements in Year 2 Cash Receipts Cash Sales Collection from Credit Customers Total Receipts $ 130,000 4,000 8,000 47,700 1.200 $ 10,000 20,000 25.000 30,000 3,000 40,000 $128,000 $ 25,000 300 4,000 20,000 16,000 50,000 12,700 $128.000 $200,000 190,900 $ 9.100 5,000 $ 4,100 $ 47,000 150,000 $197,000