Problem

Complete balance sheet and prepare a statement of cash flows—indirect method Following is...

Complete balance sheet and prepare a statement of cash flows—indirect method Following is a partially completed balance sheet for Hoeman, Inc., at December 31, 2011, together with comparative data for the year ended December 31, 2010. From the statement of cash flows for the year ended December 31, 2011, you determine the following:

• Net income for the year ended December 31, 2011, was $94,000.

• Dividends paid during the year ended December 31, 2011, were $67,000.

• Accounts receivable decreased $10,000 during the year ended December 31, 2011.

• The cost of new buildings acquired during 2011 was $125,000.

• No buildings were disposed of during 2011.

• The land account was not affected by any transactions during the year, but the fair market value of the land at December 31, 2011, was $178,000.

HOEMAN, INC.

Comparative Balance Sheets

At December 31, 2011 and 2010

 

2011

2010

Assets

 

 

Current assets:

 

 

Cash

$ 52,000

$  46,000

Accounts receivable

1 34,000

Inventory

156,000

176,000

 

Total current assets

$

$  356,000

Land

$

140,000

Buildings

290,000

 

 

Less: Accumulated depreciation

(120,000)

(105,000)

Total land and buildings

$

$  325,000

Total assets

$

$  681,000

Liabilities

Current liabilities:

 

 

Accounts payable

$

$  197,000

Note payable

155,000

124,000

Total current liabilities

$ 322,000

$  321,000

Long-term debt

$

$  139,000

Owners’ Equity

 

 

Common stock

$ 50,000

$  45,000

Retained earnings

 

176,000

Total owners’ equity 

$

$  221,000

Total liabilities and owners’ equity

$

$  681,000

Required:

a. Complete the December 31, 2011, balance sheet. (Hint: Long-term debt is the last number to compute to make the balance sheet balance.)


b. Prepare a statement of cash flows for the year ended December 31, 2011, using the indirect method.

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