Working backward to the balance sheet at the beginning of the period. (Problems 37 through 39 derive from problems by George H. Sorter.) The following data relate to the Prima Company.

(1) Exhibit 3.12: Balance sheet at December 31, Year 2

(2) Exhibit 3.13: Statement of net income and retained earnings for Year 2.

(3) Exhibit 3.14: Statement of cash receipts and disbursements for Year 2 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 1 , Year 2. (Hint: Using the transactions spreadsheet template available with this book, set up row labels for each of the accounts in the balance sheet and enter the December 3 1 , Year 2 amounts from the balance sheet in the last column of the spreadsheet. Using the information in 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 rows and columns of the spreadsheet. Finally, program the cells under the January 1, Year 2, column to compute the amounts in balance sheet accounts on January 1, Year 2).