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Pratt Corp. 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. b. Prepare the Year 2 statement of changes in stockholders' equity. PRATT CORP. Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Beginning common stock Ending common stock Beginning retained earnings Ending retained earnings Total stockholders' equity

Pratt Corp. 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. b. Prepare the Year 2 statement of changes in stockholders' equity. PRATT CORP. Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Beginning common stock Ending common stock Beginning retained earnings Ending retained earnings Total stockholders' equity

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter2: Basic Accounting Systems: Cash Basis
Section: Chapter Questions
Problem 2SEQ: The receipt of $8,000 cash for fees earned was recorded by Langley Consulting as an increase in cash...
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Pratt Corp. 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. b. Prepare the Year 2 statement of changes in stockholders' equity. PRATT CORP. Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Beginning common stock Ending common stock Beginning retained earnings Ending retained earnings Total stockholders' equity
Transcribed Image Text:Pratt Corp. 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. b. Prepare the Year 2 statement of changes in stockholders' equity. PRATT CORP. Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Beginning common stock Ending common stock Beginning retained earnings Ending retained earnings Total stockholders' equity
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