Problem #3

3. Karen Corporation has recently decided to go public and hired you as an independent CPA. One statement that the entity is anxious is the preparation of the statement of cash flows. Financial statements of Karen Corporation for 2019 and 2018 are provided below. Statements of Financial Position 12/31/19 12/31/18 Cash P 153,000 P 72,000 Accounts receivable 135.000 81,000 Merchandise inventory 144,000 180,000 Property, plant and equipment (net of accumulated depreciation of P120,000 and P114,000 as of 12/31/19 and 12/31/18 respectively) 108 000 246.000 540.000 579.000 Accounts payable P 66,000 P 36,000 Income taxes payable 132.000 147.000 Bonds payable 135,000 225,000 Share capital 81,000 81,000 Retained earnings 126.000 90 000 P 540.000 P579.000 Income Statement For the year ended December 31, 2019 Sales P 3,150.000 Cost of Sales 2,682.000 Gross profit 468,000 Selling expenses P 225,000 Administrative expenses 72 000 297.000 Income from operations 171,000 Interest expense 27.000 Profit before taxes 144,000 Income taxes 36.000 Profit P 108,000 The following additional data were provided: 1. Dividends for the year 2019 were P72,000. 2. During the year, an equipment was sold for P90,000. This equipment originally cost P132,000 and had a book value of P108,000 at the date of sale. The loss on sale was incorrectly charged to cost of sales. 3. All depreciation expense is in the selling expense category. QUESTIONS: Based on the above and the result of your engagement, you are asked to provide the following information for the year ended December 31, 2019 The net cash provided by operating activities. The net cash provided (used) by investing activities is The amount of cash received from customer Under the direct method, the cash paid for income taxes The net cash provided (used) by financing activities is