Question

Pratt Corp. started the accounting period with $30,000 of assets, $12,000 of liabilities, and $5,000 of retained earnings. During the 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 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.

Required
a. Prepare an income statement, statement of changes in stockholders’ equity, year-end balance sheet, and statement of cash flows for the accounting period.
b. Determine the percentage of total assets that were provided by creditors, investors, and earnings.



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  • CreatedOctober 12, 2013
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