Following information is given 

Operating profit 4,000,00 

Term investments 500,000 

Profit before taxes 4,500,000 

Less: Income taxes (1,400,000) 

Net profit 3,100,000 

Notes: During the year dividends for P18 million were declared and paid. 

The gain on sale of long-term investments was from the sale of investments for P25 Million in cash. These investments had an original cost of P20 Million. There were no withdrawals or disposals of plant or equipment during the year. 

Required: 

1. Prepare a statement of cash flows using the indirect method of calculating cash flow from operations.

 2. Perform a cash flow analysis. During the year, dividends of P18 million were declared and paid.

Answer rating: 100% (QA)

To prepare a statement of cash flows using the indirect method we need to analyze the given informat... View the full answer