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