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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