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