Peoria Corp. just completed another successful year, as indicated by the following income statement:

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:

Prepare statement of cash flows for 2012 using direct method in 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 the indirect method in the Operating Activities section.

NOTE:  Tutorial answers for these 2 problems has NO MEMO, only statement of cash flows/solutions