Acct201 Financial Accounting: P12-3 Peoria Corp. (Direct Method)_Req 1 only

Acct201 Financial Accounting Problem 12-3 Statement of Cash Flows (Direct Method) Peoria Corp. just completed another successful year, as indicated by the following income statement: For the Year Ended December 31, 2012 Sales revenue 1,250,000 Cost of goods sold 700,000 Gross profit 550,000 Operating expenses 150,000 Income before interest and taxes 400,000 Interest expense 25,000 Income before taxes 375,000 Income tax expense 150,000 Net income $225,000 Presented here are comparative balance sheets: December 31 2012 2011 Cash 52,000 90,000 Accounts receivable 180,000 130,000 Inventory 230,000 200,000 Prepayments 15,000 25,000 Total current assets 477,000 445,000 Land 750,000 600,000 Plant and equipment 700,000 500,000 Accumulated depreciation (250,000) (200,000) Total long-term assets 1,200,000 900,000 Total assets $1,677,000 $1,345,000 Accounts payable 130,000 148,000 Other accrued liabilities 68,000 63,000 Income taxes payable 90,000 110,000 Total current liabilities 288,000 321,000 Long-term bank loan payable 350,000 300,000 Common stock 550,000 400,000 Retained earnings 489,000 324,000 Total stockholders equity 1,039,000 724,000 Total liabilities and stockholders equity $1,677,000 $1,345,000 Other information is as follows: a. Dividends of $60,000 were declared and paid during the year. b. Operating expenses include $50,000 of depreciation. c. Land and plant and equipment were acquired for cash, and additional stock was issued for cash. Cash also was received from additional bank loans. Required: 1. Prepare statement of cash flows for 2012 using direct method in the operating activities section
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