PROBLEM # 7

7. In connection with your audit of the Karen Corporation for the year ended December 31, 2019, the following financial information were presented. Karen Corporation Statements of Financial Position December 31, 2019 and 2018 Assets 2019 2018 Cash and Cash equivalents P45,000 P 15,000 Accounts receivable 75,000 37,500 Inventory 30,000 22,500 Financial Asset @ Profit or Loss 285,000 285,000 Property, plant and equipment (net of accumulated depreciation of P75,000 and P90,000 as of Dec. 31, 2019 and 2018, respectively) 105,000 247,500 Intangible asset, net 15.000 22,500 Total assets P 555,000 P 630.000 Liabilities Accounts payable P 75,000 P 187,500 Income taxes payable 30,000 15,000 Deferred taxes payable 45,000 30,000 Total Liabilities 150,000 232,500 Equity Share capital 97,500 97,500 Retained earnings 307.500 300.000 Total Equity 405,000 397.500 Total liabilities and equity P 555,000 P630,000 Karen Corporation Income Statement For the year ended December 31, 2019 Sales P 450,000 Cost of sales (150.000) Gross profit 300,000 Administrative and selling expenses (30,000) Interest expense (30,000) Depreciation of property, plant and equipment (30,000) Amortization of intangible asset (7,500) Dividend income 45,000 Profit before income taxes 247,500 Income tax expense (60.000) Profit 187,500 Additional information: The company pays salaries and other employee dues before the end of each month. All administration and selling expenses incurred were paid before December 31, 2019. Dividend income comprised of dividends received from investment measured at profit or loss securities. This was received before December 31, 2019. Dividends received were classified under inwesting activities in last year's statement of cash flows. Equipment with a carrying amount P112,500 and cost of P157,500 was sold for P112,500. The company declared and paid dividends of P180,000 to its shareholders during Questions: Based on the above and the result of your audit, determine the following: a. Cash collections from costumers b. Cash paid to suppliers and employees C. Cash paid for income taxes d. Net cash provided by operating activities e. Net cash used in investing and financing activities