Prepare balance sheet and retained earnings statement using statement of cash flows data Following are a statement of cash flows (indirect method) for Harris, Inc., for the year ended December 31, 2011, and the firm’s balance sheet at December 31, 2010:
HARRIS, INC. Statement of Cash Flows For the Year Ended December 31, 2011 | |
Cash Flows from Operating Activities: |
|
Net income | $ 13,000 |
Add (deduct) items not affecting cash: |
|
Depreciation expense | 29,000 |
Increase in accounts receivable | (6,000) |
Decrease in merchandise inventory | 30,000 |
Increase in accounts payable | 3,000 |
Net cash provided by operating activities | $ 69,000 |
Cash Flows from Investing Activities: |
|
Purchase of buildings | (90,000) |
Proceeds from sale of land at its cost | 7,000 |
Net cash used by investing activities | $(83,000) |
Cash Flows from Financing Activities: |
|
Payment of short-term debt | (4,000) |
Payment of notes payable | (9,000) |
Proceeds from issuance of long-term debt | 15,000 |
Proceeds from issuance of common stock | 8,000 |
Payment of cash dividends on common stock | (5,000) |
Net cash provided by financing activities | $ 5,000 |
Net decrease in cash for the year | $ (9,000) |
HARRIS, INC. Balance Sheet At December 31, 2010 | |
Assets |
|
Cash | $ 15,000 |
Accounts receivable | 61,000 |
Merchandise inventory | 76,000 |
Total current assets | $152,000 |
Land | 34,000 |
Buildings | 118,000 |
Less: Accumulated depreciation. . | (72,000) |
Total land and buildings | $ 80,000 |
Total assets | $232,000 |
Liabilities |
|
Accounts payable | $ 58,000 |
Short-term debt | 16,000 |
Notes payable | 33,000 |
Total current liabilities | $107,000 |
Long-term debt | 50,000 |
Owners’ Equity |
|
Common stock, no par | $ 20,000 |
Retained earnings | 55,000 |
Total owners’ equity | $ 75,000 |
Total liabilities and owners’ equity | $232,000 |
Required:
a. Using the preceding information, prepare the balance sheet for Harris, Inc., at December 31, 2011.
b. Prepare a statement of changes in retained earnings for the year ended December 31, 2011.
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