Question

Prat Corp, started the 2018 accounting period with $33,000 of assets (all cash), $13,500 of liabilities, and $8,000 of common stock. During the year, the Retained Earnings account increased by $10,550. The bookkeeper reported that Prat paid cash expenses of $27,500 and paid a $2,300 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 $6,000 cash to reduce the liability owed to the bank, and the business acquired $7,400 of additional cash from the issue of common stock. Problem 1-34 Part a Required (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.) a-1. Prepare an income statement for the 2018 accounting period. a-2. Prepare a statement of changes in stockholders' equity for the 2018 accounting period. a-3. Prepare a period-end balance sheet for the 2018 accounting period. a-4. Prepare a statement of cash flows for the 2018 accounting period. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg A3 ReqM Prepare a period-end balance sheet for the 2018 accounting period. Prat Corp. Balance Sheet As of December 31, 2018 Total assets Liabilities Stockholders' Equity Total stockholders' equity Total inities and stockholders equity

Answer 1

1. Income statement

Prat Corp.
Income Statement
For the year ending 2018
Particular	Amount($)
Sales Revenue (Balancing figure)	40,350
Less: Expenses	(27,500)
Net Profit	12,850
Less: Dividend	(2,300)
Profit transfered to retained earnings	10,550

2. Statement of changes in stakeholder's equity.

Particular	Common stock($)	Retained Earnings($)	Total($)
Opening Balance	8,000	11,500	19,500
Issue of common stock	7,400	-	7,400
Profit during the year	-	12,850	12,850
Dividend paid	-	(2,300)	(2,300)
Closing Balance	15,400	22,050	37,450

3. Balance sheet

Prat Corp.
Balance Sheet
As of December 31, 2018
Assets		Amount($)
Current Assets
Cash	CFS	44,950
Total Assets		44,950
Equity and Liabilities
Stockholder's Equity
Common Stock		15,400
Retained Earnings		22,050
Total Stockholder's Equity		37,450
Liabilities	(13,500-6000)	7,500
Total Liability and stockholder's equity		44,950

4. Statement of Cash flows

Prat Corp.
Cash Flow Statement
For the year ended 2018
Particular	Amount ($)
Cash Flow from operating activites
Increase in Retained earnings	10,550
Net cash provided by operating activity	10,550
Cash flow from financing activity
Increase in common stock	7,400
Reduction in debt	6,000
Net cash provided by financing activity	1,400
Increase in cash	11,950
Cash at beginning of the year	33,000
Cash at end of the year	44,950