Required information Problem 1-33A (Algo) Interrelationships among financial statements LO 1-5, 1-7, 1-8 [The following information applies to the questions displayed below.] Pratt Corporation 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. Problem 1-33A (Algo) Part a Required a. Prepare the Year 2 income statement. PRATT CORP. Income Statement For the Year Ended December 31, Year 2 $ 0

Required information Problem 1-33A (Algo) Interrelationships among financial statements LO 1-5, 1-7, 1-8 [The following information applies to the questions displayed below] Pratt Corporation 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. Problem 1-33A (Algo) Part a Required a. Prepare the Year 2 income statement. Required information Problem 1-33A (Algo) Interrelationships among financial statements LO 1-5, 1-7, 1-8 [The following information applies to the questions displayed below] Pratt Corporation 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. Problem 1-33A (Algo) Part a Required a. Prepare the Year 2 income statement