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:
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HARRIS, 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 |
$ 13,000 |
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Add (deduct) items not affecting cash: |
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Depreciation expense |
29,000 |
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Increase in accounts receivable |
(6,000) |
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Decrease in merchandise inventory. |
30,000 |
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Increase in accounts payable |
3,000 |
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Net cash provided by operating activities |
$ 69,000 |
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Cash Flows from Investing Activities: |
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Purchase of buildings |
(90,000) |
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Proceeds from sale of land at its cost |
7,000 |
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Net cash used by investing activities |
$(83,000) |
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Cash Flows from Financing Activities: |
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Payment of short term debt |
(4,000) |
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Payment of notes payable |
(9,000) |
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Proceeds from issuance of long term debt |
15,000 |
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Proceeds from issuance of common stock |
8,000 |
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Payment of cash dividends on common stock |
(5,000) |
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Net cash provided by financing activities |
$ 5,000 |
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Net decrease in cash for the year |
$ (9,000) |
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HARRIS, INC. |
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Balance Sheet |
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At December 31, 2010 |
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Assets |
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Cash |
$ 15,000 |
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Accounts receivable |
61,000 |
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Merchandise inventory |
76,000 |
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Total current assets. |
$152,000 |
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Land |
34,000 |
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Buildings |
118,000 |
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Less: Accumulated depreciation. |
(72,000) |
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Total land and buildings |
$ 80,000 |
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Total assets |
$232,000 |
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Liabilities |
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Accounts payable |
$ 58,000 |
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Short term debt |
16,000 |
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Notes payable |
33,000 |
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Total current liabilities |
$107,000 |
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Long term debt |
50,000 |
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Owners’ Equity |
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Common stock, no par |
$ 20,000 |
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Retained earnings |
55,000 |
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Total owners’ equity |
$ 75,000 |
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Total liabilities and owners’ equity |
$232,000 |
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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.