# Problem 12-3_Problem 12-4_Statement of Cash Flows

\$14.00

Category:

## Description

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.

Required:

Prepare statement of
cash flows for 2012 usingdirect methodin the operating activities section

Problem 12-4 Statement
of Cash Flows Indirect Method

Refer to all of the
facts in Problem 12-3.

Required

Prepare a statement of
cash flows for 2012 using theindirect methodin the Operating Activities section.

## Reviews

There are no reviews yet.