Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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 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 Determine the balance in the revenue, expense, and dividends accounts as of January 1, Year 3. Revenue accounts balance Expense accounts balance Dividends account balance January 1, Year 3

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting Foundations and Evolutions

Authors: Michael R. Kinney, Cecily A. Raiborn

9th edition

9781285401072, 1111971722, 1285401077, 978-1111971724

More Books

Students also viewed these Accounting questions

Question

Define positive thinking and cite its benefits.

Answered: 1 week ago