Problem -1: Carsal Company provided the following information for the preparation of a statement of cash flows for the current year:

Carsal Company

Balance Sheet

December 31, 2018

2018 2017

Assets

Cash and cash equivalents 47,500 24,300

Accounts receivable 21,500 26,000

Prepaid Insurance 2,500 1,800

Inventory 48,000 45,500

Land 20,000 10,000

Plant assets 230,000 190,000

Accumulated Depreciation (85,500) (71,100)

Total assets 284,000 226,500

Liabilities and Equity

Liabilities:

Accounts payable 17,200 19,000

Salaries Payable 1,900 1,500

Notes Payable 85,000 75,000

Total Liabilities 104,100 95,500

Equity:

Common Stock 115,000 70,000

Retained Earnings 64,900 61,000

Total Equity 179,900 131,000

Total Liabilities and Equity 284,000 226,500

Carsal Company

Income Statement

For the year ended December 31, 2018

Sales Revenue 238,000

Cost of Goods Sold (153,000)

Gross Profit 85,000

Operating Expenses:

Depreciation Expense 14,400

Insurance Expense 12,000

Salaries Expense 42,600

Other Operating Expenses 11,100

Total Operating Expenses (80,100)

Operating Income 4,900

Other Revenue and (Expenses):

Gain on Sale of Land 4,800

Interest Expense (3,500)

Total Other Revenue and Expenses 1,300

Income Before Income Tax 6,200

Income Tax Expense (1,860)

Net Income 4,340

Additional Information:

1. Carsal Company sold land with an original cost of P10,000, for 14,800 cash.

2. Anew parcel of land was purchased for P20,000, in exchange for a note payable.

3. Plant assets were purchased for P40,000 CASH.

4. Carsal Company declared and paid a P440 cash dividend to shareholders.

5. Carsal issued common stock in exchange for P45,000 cash.

Requirement: Prepare a statement of cash flows for the year ended December 31, 2018 using the indirect method (30 points)