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, 2014. Also shown is a partially completed comparative balance sheet as of December 31, 2014 and 2013:
HARTFORD, INC.
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash Flows from Operating Activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,000
Add (deduct) items not affecting cash:
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,000
Decrease in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,000
Increase in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,000)
Increase in notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,000
Decrease in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,000)
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . $ 228,000
Cash Flows from Investing Activities:
Purchase of equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(150,000)
Purchase of buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (144,000)
Net cash used by investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . $(294,000)
Cash Flows from Financing Activities:
Proceeds from short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000
Cash used for retirement of long-term debt . . . . . . . . . . . . . . . . . . . . . (75,000)
Proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . 30,000
Payment of cash dividends on common stock . . . . . . . . . . . . . . . . . . . . (9,000)
Net cash used by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . $ (39,000)
Net decrease in cash for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(105,000)
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Required:
a. Complete the December 31, 2014 and 2013, balance sheets.
b. Prepare a statement of changes in retained earnings for the year ended December 31,2014.