Statement of Cash FlowsDirect Method

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

	For the Year Ended December 31, 2017

Sales revenue	$1,249,630
Cost of goods sold	700,830
Gross profit	$548,800
Operating expenses	148,670
Income before interest and taxes	$400,130
Interest expense	24,490
Income before taxes	$375,640
Income tax expense	150,256
Net income	$225,384

Presented here are comparative balance sheets:

	December 31
	2017		2016
Cash	$50,060		$90,220
Accounts receivable	180,670		129,560
Inventory	231,270		200,480
Prepayments	15,350		25,950
Total current assets	$477,350		$446,210
Land	$748,270		$598,420
Plant and equipment	700,610		498,030
Accumulated depreciation	(251,170)		(198,570)
Total long-term assets	$1,197,710		$897,880
Total assets	$1,675,060		$1,344,090
Accounts payable	$129,490		$147,450
Other accrued liabilities	67,940		62,240
Income taxes payable	89,420		110,870
Total current liabilities	$286,850		$320,560
Long-term bank loan payable	$350,980		$300,900
Common stock	$550,060		$400,590
Retained earnings	487,170		322,040
Total stockholders' equity	$1,037,230		$722,630
Total liabilities and stockholders' equity	$1,675,060		$1,344,090

Other information is as follows:

1. Dividends of $60,254 were declared and paid during the year.
2. Operating expenses include $52,600 of depreciation.
3. Land and plant and equipment were acquired for cash, and additional stock was issued for cash. Cash also was received from additional bank loans.

The president has asked you some questions about the year's results. She is very impressed with the profit margin of 18.04% (net income divided by sales revenue). She is bothered, however, by the decline in the company's cash balance during the year. One of the conditions of the existing bank loan is that the company maintain a minimum cash balance of $52,600.

Required:

1. Prepare a statement of cash flows for 2017 using the direct method in the Operating Activities section. Use the minus sign to indicate cash payments, cash outflows, or decreases in cash.

Peoria Corp. Statement of Cash Flows For the Year Ended December 31, 2017

Cash Flows from Operating Activities
Accounts ReceivableCash collections from customersCredit sales to customersNet incomeNet lossRetained earningsCash collections from customers	$Cash collections from customers
Cash payments for:
Acquisition of landAcquisition of plant and equipmentAdditional long-term borrowingsCash dividends paidIncrease in accounts payableInventoryInventory	$Inventory
Acquisition of landAdditional long-term borrowingsCash dividends paidIncrease in accounts payableIssuance of common stockOperating expensesOperating expenses	Operating expenses
Acquisition of landAcquisition of plant and equipmentAdditional long-term borrowingsIncrease in accounts payableInterestIssuance of common stockInterest	Interest
Acquisition of landAcquisition of plant and equipmentAdditional long-term borrowingsIncome taxesIncrease in income taxes payableIssuance of common stockIncome taxes	Income taxes
Total cash payments	$fill in the blank e32bc5076fe6ff8_11
Net cash provided by operating activitiesNet cash used by operating activitiesNet cash provided by operating activities	$Net cash provided by operating activities
Cash Flows from Investing Activities
Acquisition of landAdditional long-term borrowingsCash dividends paidIncome taxesInventoryOperating expensesAcquisition of land	$Acquisition of land
Acquisition of plant and equipmentAdditional long-term borrowingsInterestInventoryIssuance of common stockOperating expensesAcquisition of plant and equipment	Acquisition of plant and equipment
Net cash provided by investing activitiesNet cash used by investing activitiesNet cash used by investing activities	$Net cash used by investing activities
Cash Flows from Financing Activities
Acquisition of landAcquisition of plant and equipmentAdditional long-term borrowingsInterestInventoryRetained earningsAdditional long-term borrowings	$Additional long-term borrowings
Acquisition of landAcquisition of plant and equipmentInterestInventoryIssuance of common stockRetained earningsIssuance of common stock	Issuance of common stock
Acquisition of landCash dividends paidIncome taxesInventoryOperating expensesRetained earningsCash dividends paid	Cash dividends paid
Net cash provided by financing activitiesNet cash used by financing activitiesNet cash provided by financing activities	$Net cash provided by financing activities
Net decrease in cashNet increase in cashNet decrease in cash	$Net decrease in cash
Cash balance, December 31, 2016	fill in the blank e32bc5076fe6ff8_30
Cash balance, December 31, 2017	$fill in the blank e32bc5076fe6ff8_31