Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 109

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.

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b. Prepare a statement of changes in retained earnings for the year ended December 31, 2011.

Step 1 of 2

Complete balance sheet & prepare a statement of changes in retained earnings

a) The completion of the presented balance sheet as at December 2011 and 2010, is as follows: