Question

Ch 1 Homework Part 3 of 5 Required information Problem 1-33A Interrelationships among financial statements LO 1-2, 1-3, 1-5, 1-6, 1-7 The following information applies to the questions displayed below.) 66 pints Pratt Corp. started the Year 2 accounting period with total assets of $34.000 cash, $14,000 of liabilities, and $9,000 of retained earnings. During the Year 2 accounting period, the Retained Earnings account increased by $11,550. The bookkeeper reported that Pratt paid cash expenses of $28,000 and paid a $2.400 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 $7,000 cash to reduce the liability owed to a bank, and the business acquired $7,700 of additional cash from the issue of common stock. Assume all transactions are cash transactions. Print Problem 1-33A Part c. Prepare the Year 2 balance sheet References PRATT CORP Balance Sheet As of December 31, Year 2 Assets Cash . Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity 50 wwwwwwwwwwwwwwwww < Prey 10 11 12 of 12 !!!

Answer 1

Balance Sheet:

PRATT CORP.
Balance Sheet
As of December 31, Year 2
Assets
Cash	$46,250
Total assets		$46,250
Liabilities		$7,000
Stockholder's equity:
Common stock	$18,700
Retained earnings	$20,550
Total stockholders' equity		$39,250
Total liabilities and stockholders' equity		$46,250

Calculations:

1	Increase in retained earnings	$11,550
	Add: Dividends	$2,400
	Net income	$13,950
	Add: Expenses	$28,000
	Revenues	$41,950
2	Cash beginning balance	$34,000
	Cash revenues	$41,950
	Cash expenses	($28,000)
	Cash dividends	($2,400)
	Bank loan paid	($7,000)
	Issuance of stock	$7,700
	Cash ending balance	$46,250
3	Liabilities beginning	$14,000
	Bank loan paid	($7,000)
	Liabilities ending	$7,000
4	Assets, beginning	$34,000
	Liabilities, beginning	($14,000)
	Retained earnings	($9,000)
	Common stock, beginning	$11,000
	Add: New issue	$7,700
	Common stock, ending	$18,700
5	Retained earnings, beginning	$9,000
	Add: increase	$11,550
	Retained earnings, ending	$20,550