Complete balance sheet and prepare a statement of changes in retained earnings Following is a statement of cash flows (indirect method) for Hartford, Inc., for the year ended December 31, 2011. Also shown is a partially completed comparative balance sheet as of December 31, 2011 and 2010:
HARTFORD, INC. Statement of Cash Flows For the Year Ended December 31, 2011 | |
Cash Flows from Operating Activities: |
|
Net income | $ 9,000 |
Add (deduct) items not affecting cash: |
|
Depreciation expense | 45,000 |
Decrease in accounts receivable | 23,000 |
Increase in inventory | (7,000) |
Increase in notes payable | 12,000 |
Decrease in accounts payable | (6,000) |
Net cash provided by operating activities | $ 76,000 |
Cash Flows from Investing Activities: |
|
Purchase of equipment | $(50,000) |
Purchase of buildings | (48,000) |
Net cash used by investing activities | $(98,000) |
Cash Flows from Financing Activities: |
|
Proceeds from short-term debt | 5,000 |
Cash used for retirement of long-term debt | $(25,000) |
Proceeds from issuance of common stock | 10,000 |
Payment of cash dividends on common stock | (3,000) |
Net cash used by financing activities | $(13,000) |
Net decrease in cash for the year | $(35,000) |
HARTFORD, INC. Comparative Balance Sheets At December 31, 2011 and 2010 | ||
| 2011 | 2010 |
Assets |
|
|
Current assets: |
|
|
Cash | $ | $ 88,000 |
Accounts receivable |
| 73,000 |
Inventory | 56,000 |
|
Total current assets | $ | $ |
Land | $ | $ 40,000 |
Buildings and equipment | 260,000 |
|
Less: Accumulated depreciation |
| (123,000) |
Total land, buildings, and equipment | $ | $ |
Total assets | $ | $ |
Liabilities |
|
|
Current liabilities: |
|
|
Accounts payable | $ | $ 29,000 |
Short-term debt | 32,000 |
|
Notes payable |
| 36,000 |
Total current liabilities | $ | $ |
Long-term debt | $ 85,000 | $ |
Owners’ Equity |
|
|
Common stock | $ 40,000 | $ |
Retained earnings |
|
|
Total owners’ equity | $ | $ |
Total liabilities and owners’ equity | $ | $ |
Required:
a. Complete the December 31, 2011 and 2010, balance sheets.
b. Prepare a statement of changes in retained earnings for the year ended December 31, 2011.
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