P1 (Statement of Cash flow) During the year, the entity recognized doubtful

accounts expense of P30,000 and wrote off

The entity reported the following income statement uncollectible accounts of P10,000.
for the year ended Dec. 31, 2017:
Required: Determine the cash flow from operating
Sales 4,500,000 activities using direct method and indirect method
Cost of goods sold:

Inventory - Jan 1 750,000

Purchases 2,850,000
2017 2016
Goods available for sale 3,600,000
Cash and cash equivalents 2,350,000 350,000
Inventory - Dec. 31 (600,000) 3,000,000 Accounts receivable, net of
allowance 600,000 700,000
Gross Income 1,500,000
Expenses: Inventory 1,000,000 850,000
Investment in Hall Company at
Salaries 600,000 equity 2,200,000 2,000,000

Rent 250,000 Land 2,000,000 1,500,000

Insurance 20,000 Property, plant and equipment 5,000,000 4,000,000

Doubtful accounts expense 30,000 Accumulated depreciation (1,050,000) (800,000)

Other Expenses 100,000 Goodwill 400,000 400,000

Depreciation 50,000 1,050,000 12,500,000 9,000,000

Net Income 450,000

Accounts payable 600,000 550,000
additional Information
Note payable-long term 500,000 -
Dec. 31 Jan. 1
Bonds payable 1,600,000 2,100,000
Accounts receivable 540,000 440,000
Share capital, P100 par 5,250,000 4,000,000
Allowance for doubtful accounts 40,000 20,000
Share premium 2,700,000 1,750,000
Inventory 600,000 750,000
Retained earnings 1,850,000 1,300,000
Prepaid Insurance 150,000 10,000
Treasury share, at cost - (700,000)
Accounts payable 280,000 160,000
12,500,000 9,000,000
Accrued salaries payable 50,000 80,000

Equipment 1,200,000 1,200,000

Additional information:
Accumulated depreciation 290,000 240,000 The net income for the current year was P3,050,000
-Cash dividend paid amounted to P2,500,000.
-The entity sold equipment costing P200,000 with
carrying amount of P50,000 for P70,000 cash
-The entity issued 10,000 shares of capital for P150
per share cash.
-The entity sold all of its treasury shares for
P900,000 cash.
-Individual Holding P500,000 face value bonds
exercised their conversion privilege. Each of the
500 bonds was converted into 5 shares of capital.
- The entity purchased equipment for P1,200,000.
-Land with a fair value of P500,000 was purchased
through the issuance of a long term note.
Required;
Prepare a statement of Cash flows for the current
year.