Answer:
1.Net Profit $12,850
Profit transfered to retained earnings $10,550
2. $37,450
3.$44,950
4a.$44,950
4b.CREDITORS=16.69%
INVESTORS=34.26%
EARNINGS=49.05%
Explanation:
1. Preparation of Income statement
Prat Corp. Income Statement
For the year ending 2018
Sales Revenue (Balancing figure) 40,350
(27,500+10,550+2,300)
Less: Expenses (27,500)
Net Profit 12,850
Less: Dividend (2,300)
Profit transfered to retained earnings $10,550
2. Preparation for Statement of changes in stakeholder's equity.
Common stock($) Retained Earnings($) Total($)
Opening Balance 8,000 11,500 19,500
(33,000-13,500-8,000)
Issue of common stock 7,400 - 7,400
Profit during the year - 12,850 12,850
(40,350-27,500)
Dividend paid - (2,300) (2,300)
Closing Balance $15,400 $22,050 $37,450
3. Preparation of Balance sheet
Prat Corp. Balance Sheet
As of December 31, 2018
ASSETS
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
(37,450+7,500)
4a. Preparation for Statement of Cash flows
Prat Corp. Cash Flow Statement
For the year ended 2018
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
(7,400-6,000)
Increase in cash 11,950
(10,550+7,400-6,000)
Cash at beginning of the year 33,000
Cash at end of the year 44,950
(33,000+11,950)
4b) Calculation to Determine the percentage of total assets that were provided by creditors, investors, and earnings.
CREDITORS=7,500/44,950
CREDITORS=0.1669*100
CREDITORS=16.69%
INVESTORS=15,400/44,950
INVESTORS=0.3426*100
INVESTORS=34.26%
EARNINGS =22,050/44,950
EARNINGS=0.4905*100
EARNINGS=49.05%
