Pratt Corp. started the Year 2 accounting period with total assets of $30,000 cash, $12,000 of liabilities, and $5,000 of retained earnings. During the Year 2 accounting period, the Retained Earnings account increased by $7,550. The bookkeeper reported that Pratt paid cash expenses of $26,000 and paid a $2,000 cash dividend to stockholders, but she could not find a record of the amount of cash revenue that Pratt received for performing services. Pratt also paid $3,000 cash to reduce the liability owed to a bank, and the business acquired $4,000 of additional cash from the issue of common stock. Assume all transactions are cash transactions.

Required
a. Prepare the Year 2 income statement.

b. Prepare the Year 2 statement of changes in stockholders’ equity

c. Prepare the Year 2 balance sheet.

d. Prepare the Year 2 statement of cash flows.

e. Determine the percentage of total assets provided by creditors, investors, and earnings.

f. If the company were liquidated on December 31, Year 2, how much cash would be distributed to the creditors? How much cash would be distributed to the owners?