Indirect Method
Dollar Company
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash Flows from Operating Activities
Profit before Income Tax ₱ 828,500.00
Adjustments for
Depreciation Expense ₱ 290,000.00
Interest Expense ₱ 60,000.00
Operating Income Before Working Capital Changes ₱ 1,178,500.00
Decrease in Accounts Receivables ₱ 110,000.00
Increase in Inventory ₱ (200,000.00)
Decrease in Accounts Payable ₱ (90,000.00)
Cash Generated from Operating Activities ₱ 998,500.00
Income Taxes Paid ₱ 223,350.00
Net Cash from Operating Activities ₱ 775,150.00
Cash Flows from Investing Activities
Purchase of Equipment ₱ (1,880,000.00)
Cash Flows from Financing Activities
Issue of Ordinary Share Capital ₱ 550,000.00
Issue of Bonds at Par ₱ 1,000,000.00
Cash Dividends paid ₱ (259,950.00) ₱ 1,290,050.00
Net Increase in Cash ₱ 185,200.00
Add Cash Balance, January 1 ₱ 42,000.00
Cash Balance, December 31 ₱ 227,200.00
Profit before tax: Profit for the year / 70%
: 579,950/70%
Dividends paid: Profit for the year- retained earnings
: 579,950-320,000
Income taxes paid: Profit before interest and income tax x 30%= A- Income tax payable
: 828,500 x 30% = 248,550 - 25,200 = 223,350
Dividends paid is 259,950, computed as 579,950-320,000
Income taxes paid is 30% x 828,500= 248,550-25,200= 223,350
A. Direct Method
Plains and Prints
Statement of Cash Flows
For The Year Ended December 31, 2018
Cash Flow From Operating Activities
Collections from Customers
Payment to Suppliers
Payment to Accrued Expenses
Cash Flow from Operations Before Interest and Income Tax
Payment of Interest
Payment of Income Tax
Net Cash Flow from Operating Activities
Cash Flow From Investing Activities
Sale of Land
Sale of Equipment
Purchase of Equipment
Cash Flow From Financing Activities
Redemption of Bonds Payable
Issue of Shares
Payment of Dividends
Increase in Cash During the Period
Cash Balance, December 31,2017
Cash Balance, December 31,2018
Collections from customers : Net sales+ 2017 Trade receivable- 2018 Trade Receivable
: 4,450,000 + 130,000 - 340,000 = 4,240,000
Payment to Suppliers: COGS+ Inventory+ Beg. Accounts Payable- End. Accounts Payable
: 2,325,000 + 270,000 + 200,000 - 115,000 = 2,680,000
Payment of Accrued Expenses:Selling and Administrative Expenses- Depreciation Exp- Accrued Exp.+End. Prepaid Exp. -Beg. Pr
:1,105,000 - 165,000 - 50,000 + 20,000 - 30,000 = 880,000
B. Indirect Method
Plains and Prints
Statement of Cash Flows
For The Year Ended December 31, 2018
Cash Flow From Operating Activities
Profit Before Interest and Income Tax
Adjustments For
Depreciation Expense
Loss on Sale of Equipment
Increase in Trade Receivables
Increase in Inventories
Increase Prepaid Expenses
Decrease in Accounts Payable
Increase in Accrued Expenses
Cash From Operations Before Interest and Income Tax
Interest paid
Income tax paid
Net Cash Flow From Operating Activities
Notes:
Profit Before Interest and Income Tax: COGS-Expenses- Loss on sale of equipment
: 2,325,000-1,105,000-10,000
ints
sh Flows
ember 31, 2018
₱ 4,240,000.00
₱ (2,680,000.00)
₱ (880,000.00)
₱ 680,000.00
₱ (60,000.00)
₱ (325,000.00)
₱ 295,000.00
₱ 125,000.00
₱ 170,000.00
₱ (830,000.00) ₱ (535,000.00)
₱ (200,000.00)
₱ 800,000.00
₱ (275,000.00) ₱ 325,000.00
₱ 85,000.00
₱ 185,000.00
₱ 270,000.00
2018 Trade Receivable
e- End. Accounts Payable
= 2,680,000
ses- Depreciation Exp- Accrued Exp.+End. Prepaid Exp. -Beg. Prepaid Exp.
0,000 - 30,000 = 880,000
ints
sh Flows
ember 31, 2018
₱ 1,210,000.00
₱ 165,000.00
₱ 10,000.00
₱ (210,000.00)
₱ (270,000.00)
₱ 10,000.00
₱ (85,000.00)
₱ 50,000.00
₱ (60,000)
₱ (325,000)
₱ 665,000
sale of equipment
