The comparative balance sheet of De Leon Company for December 31,2019 and 2020,is as follows:

De Leons Company

Comparative Balance Sheet

December 31, 2022 and 2021

2022 2021

Assets

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 140,350 P 95,900

Accounts Receivable (Net) . . . . . . . . . . 95.300 102.300

Inventories . . . . . . . . . . . . . . . . . . . . . . . 165,200 157,900

Prepaid expenses . . . . . . . . . . . . . . . . . . 6,240 5,860

Investments (long term) . . . . . . . . . . . . . . 35,700 84,700

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 90,000

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . 375,000 260,000

Accumulated depreciation Buildings . . . (71,300) (58,300)

Machinery and Equipment . . . . . . . . . . 428,300 428,300

Accumulated depreciation-Machinery & Eqpt . . (148,500) (138,000)

Patents . . . . . . . . . . . . . . . . . . . . . . . .. . 58,000 65,000

Total assets . . . . . . . . . . . . . . . . . . . . . . . P 1,159,290 P1,093,660

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Liabilities and Stockholders Equity

Accounts payable (merchandise creditors) P 43,500 P 46,700

Accrued expenses payable (operating expenses) 14,000 12,500

Income taxes payable . . . . . . . . . . . . . . . . .. 7,900 8,400

Dividends payable . . . . . . . . . . . . . . . . . . . . . 14,000 10,000

Mortgage notes payable (due 2024) . . . . . . . 40,000 0

Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . 150,000 250,000

Common stock (P30 par) . . . . . . . . . . . . . . . . 450,000 375,000

Excess of issue price over par-Common stock 66,250 41,250

Retained earnings . . . . . . . . . . . . . . . . . . . . . 373,640 349,810

Total Liabilities and Stockholders Equity P1,159,290 P1,093,660

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De Leons Company

Income Statement

For the year ended December 31, 2022

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 1,100,000

Cost of Merchandise sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. 710,000

Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. P 390,000

Operating expenses:

Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . P 23,500

Patent amortization . . . . . . . . . . . . . . . . . . . . . . .. . . . 7,000

Other operating expenses . . . . . . . . . . . . . . . . . . . . . 196,000

Total operating expenses . . . . . . . .. . . . . . . . . 226,500

Income from operation . . . . . . . . . . . . . . . . . . . . . . . . . . 163,500

Other income:

Gain on sale of Investment . . . . . . . . . . . . . . . . . . . 11,000

Other expenses:

Internet expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000 (15,000)

Income before Income tax P 148,500

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 98,500

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An examination of the accounting records revealed the following additional information applicable to 2022:

Land costing P15,000 was sold for P15,000.

A mortgage note was issued for P40,000.

A building costing P115,000 was constructed.

2,500 shares of common stock were issued at P40 in exchange for the bonds payable.

Cash dividends declared were P74,670.

Instructions:

Prepare a statement of cash flows, using the indirect method of reporting cash flows from operating activities.

Prepare a statement of cash flows using direct method of reporting cash flows from operating activities