Problem 16-15 (AICPA Adapted) Forever Company showed the following financial statements for 2015 3,850,000 2,270,000 1,580,000 Sales Cost of goods sold Gross income Expenses: Salaries Depreciation Other expenses Bad debt expense (writeoff, P10,000) Net income 580,000 240,000 290,000 30,000 1,140,000 440,000 2015 2014 Assets Cash and cash equivalents Accounts receivable Allowance for doubtful accounts Inventory Prepaid expenses Property, plant and equipment Accumulated depreciation Goodwill 170,000 130,000 450,000 410,000 ( 50,000) ( 30,000) 840,000 910,000 50,000 40,000 2,550,000 2,200,000 ( 700,000) (600,000) 360,000 360,000 3,670,000 3,420,000 Liabilities and Equity Accounts payable Salaries payable Note payable - bank Share capital Retained earnings 300,000 70,000 2,150,000 1,150,000 3,670,000 240,000 100,000 250,000 1,950,000 880,000 3,420,000 Additional information 1. A cash dividend of P170,000 was declared and paid during the year. 2. Equipment of P200,000 with accumulated depreciation of P140,000 was sold for cash at no gain or loss. 3. The net change in the equipment after considering the equipment sold was the result of a cash acquisition. 4. The note payable-bank matured this year and was accordingly paid in cash. 5. The share capital was issued for cash. Required: a. Prepare statement of cash flows for the current year using the direct method. b. Compute the cash flow from operating activities using the indirect method