STATEMENTOFCASHFLOWS ASt at ementofCashFl owsi sacomponentoff i nanci al st at ement ssummar i zi ngt heoper at i ng,i nvest i ng,and f i nanci ngact i vi t i esofanent i t y. I nsi mpl el anguage,t hest at ementofcashf l owspr ovi desi nf or mat i onaboutt hecashr ecei ptandcash payment sofanent i t ydur i ngaper i od. Anent i t yshal l pr epar east at ementofcashf l owsandpr esenti tasani nt egr al par toft hef i nanci al st at ement s f oreachper i odwhi chf i nanci al st at ement sar epr esent ed. Thepr i mar ypur poseofast at ementofcashf l owsi st opr ovi der el evanti nf or mat i onaboutcashr ecei ptand cashpayment sofanent i t ydur i ngaper i od. CASHANDCASHEQUI VALENTS Thest at ementofcashf l owsi sdesi gnedt opr ovi dei nf or mat i onaboutt hechangei nanent i t y' scashandcash equi val ent s. Cashcompr i sescashonhandanddemanddeposi t s . Cashequi val ent sar eshor t t er m hi ghl yl i qui di nvest ment st hatar er eadi l yconver t i bl ei nknownamountof cashandwhi char esubj ectt oani nsi gni f i cantr i skofchangei nval ue. PAS7,par agr aph7,pr ovi dest hatani nvest mentnor mal l yqual i f i esasacashequi val entonl ywheni thasa shor tt er m mat ur i t yoft hr eemont hsorl essf r om t hedat eofacqui si t i on. I not herwor ds,t hei nvest mentmustbeacqui r edt hr eemont hsorl essf r om dat eofacqui si t i on. Exampl esofCashEqui val ent s a.Thr eemont hBSPt r easur ybi l l b.Thr eeyearBSPt r easur ybi l l pur chasedt hr eemont hsbef or edat eofmat ur i t y c.Thr eemont ht i medeposi t d.Thr eemont hmoneymar keti nst r umentorcommer ci al paper CLASSI FI CATI ONOFCASHFLOWS Cashf l owsar ei nf l owsandout f l owsofcashandcashequi val ent s. Thest at ementofcashf l owsshal l r epor tcas hf l owsdur i ngt heper i odcl assi f i edasoper at i ng,i nvest i ng,and f i nanci ngact i vi t i es. OPERATI NGACTI VI TI ES Oper at i ngact i vi t i esar et hecashf l owsder i vedpr i mar i l yf r om t hepr i nci pal r evenuepr oduci ngact i vi t i esoft he ent i t y. I not herwor ds,oper at i ngact i vi t i esgener al l yr esul tf r om t r ansact i onsandot herevent st hatent eri nt ot he det er mi nat i onofneti ncomeorl oss. Exampl esofcashf l owsf r om oper at i ngact i vi t i esar e: a.Cashr ecei ptf r om sal eofgoodsandr ender i ngofser vi ces b.Cashr ecei ptf r om r oyal t i es ,r ent al f ees ,commi ssi onsandot herr evenue c.Cashpaymentt os uppl i er sf orgoodsandser vi ces d.Cashpaymentf orsel l i ng,admi ni st r at i veandot herexpenses e.Cashr ecei pt sandcashpayment sofani nsur anceent i t yf orpr emi umsandcl ai ms,annui t i esandot her pol i cybenef i t s f . Cashpayment sorr ef undsofi ncomet axesunl essspeci f i cal l yi dent i f i edwi t hf i nanci ngandi nvest i ng act i vi t i es g.Cashr ecei pt sandpayment sf orsecur i t i eshel df ort r adi ng I NVESTI NGACTI VI TI ES I nvest i ngact i vi t i esar et hecashf l owsder i vedf r om t heacqui si t i onanddi sposal ofl ongt er m asset sandot her i nvest ment snoti ncl udedi ncashequi val ent . Asas i mpl egui de,i nvest i ngact i vi t i esi ncl udecashf l owsf r om t r ansact i onsi nvol vi ngnonoper at i ngasset s. Exampl esofcashf l owsf r om i nvest i ngact i vi t i es : a.Cashpaymentt oacqui r epr oper t y,pl antandequi pment ,i nt angi bl esandot herl ongt er m asset s b.Cashr ecei pt sf r om sal eofpr oper t y,pl antandequi pment ,i nt angi bl esandot herl ongt er m asset s c.Cashpayment st oacqui r eequi t yordebti nst r ument sofot herent i t i es( cur r entandl ongt er m i nvest ment s) d.Cashr ecei pt sf r om sal eofequi t yordebti nst r ument sofot herent i t i es e.Cashadvancesandl oanst oot herpar t i esot hert hanadvancesandl oansmadebyf i nanci al i nst i t ut i ons f . Cashr ecei pt sf r om r epaymentofadvancesandl oansmadet oot herpar t i es g.Cashpaymentf orf ut ur econt r act ,f or war dcont r act ,opt i oncont r actandswapcont r act h.Cashr ecei ptf orf ut ur econt r act ,f or war dcont r act ,opt i oncont r actandswapcont r act FI NANCI NGACTI VI TI ES Fi nanci ngact i vi t i esar et hecashf l owsder i vedf r om t heequi t ycapi t al andbor r owi ngsoft heent i t y. I not herwor ds,f i nanci ngact i vi t i esar et hecashf l owst hatr esul tf r om t r ansact i ons: a.Bet weent heent i t yandt heowner -equi t yf i nanci ng b.Bet weent heent i t yandt hecr edi t or -debtf i nanci ng I nasi mpl egui de,f i nanci ngact i vi t i esi ncl udet hecashf l owsf r om t r ansact i onsi nvol vi ngnont r adel i abi l i t i es andequi t yofanent i t y. Exampl esofcashf l owf r om f i nanci ngact i vi t i es : a.Cashr ecei pt sf r om i ssuanceofor di nar yandpr ef er enceshar es b.Cashpaymentt oacqui r et r easur yshar es c.Cashr ecei pt sf r om i ssui ngdebent ur es ,l oans ,not es,bonds ,mor t gages,andot hershor t t er m orl ongt er m bor r owi ngs d.Cashpayment sf oramountbor r owed e.Cashpayment sbyal easeef ort her educt i onoft heout st andi ngpr i nci pal l easel i abi l i t y Cashpayment st oset t l es uchobl i gat i onsast r adeaccount sandnot espayabl e,i ncomet axpayabl e,accr ued expensesar eoper at i ngact i vi t i es ,notf i nanci ngact i vi t i es . I l l ust r at i onamount sar eassumed Cashandcashequi val ent -Januar y1 3, 000, 000 Netcashpr ovi dedbyoper at i ngact i vi t i es Cashr ecei vedf r om cust omer s Rentr ecei ved I nt er estr ecei ved Di vi dendsr ecei ved Cashpai dt osuppl i er s Sal ar i espai d I nsur ancepai d I nt er estpai d I nconet axpai d 1 2, 000, 000 1 , 000, 000 1 , 500, 000 2, 000, 000 ( 8, 000, 000) ( 2, 900, 000) ( 1 00, 000) ( 500, 000) ( 2, 500, 000) 2, 500, 000 Netcashusedi ni nvest i ngact i vi t i es Cashpai df orl and Cashr ecei vedf r om sal eofequi pment Cashr ecei vedf r om sal eofi nvest ment ( 2, 000, 000) 800, 000 700, 000 ( 500, 000) Netcashpr ovi dedbyf i nanci ngact i vi t i es Cashr ecei vedf r om i ssueofshar es Cashr ecei vedf r om bankl oan Cashpai df ordi vi dends Cashpai df ort r easur yshar es 3, 000, 000 4, 500, 000 ( 3, 500, 000) ( 1 , 600, 000) 2, 400, 000 Cashandcashequi val ent December31 P7, 400, 000 Pr esent at i onofOper at i ngAct i vi t i es 1 .Di r ectMet hod-usei ncomput i ngt heact ual cashr ecei vedandcashpai d A.Col l ect i onofcashorcashs al es Account sr ecei vabl e,begi nni ng Add:Sal es( net ) Less:Account sr ecei vabl e,end Col l ect i onf r om cust omer s XXX XXX ( XXX) XXX B.Pur chases Account spayabl e,begi nni ng Add:Pur chases( net ) Less:Account spayabl e,end Paymentt osuppl i er s XXX XXX ( XXX) XXX C.I ncome I ncome Add:Accr uedI ncome,beg Def er r edi ncome,end Less:Accr uedi ncome,end Def er r edi ncome,beg Col l ect i onofcashr ecei pt XXX XXX XXX ( XXX) ( XXX) XXX D.Expense Expense Add:Accr uedexpense,beg Pr epai dexpense,end Less:Accr uedexpense,end Pr epai dexpense,beg Col l ect i onofcashr ecei pt XXX XXX XXX ( XXX) ( XXX) XXX 2.I ndi r ectMet hod-usei ncomput i ngt hei ncr easeanddecr easeofcur r entasset sandcur r entl i abi l i t i es I ft her e' sani ncr easei nbot hcur r entassetandcur r entl i abi l i t i es ,t heamountofcur r entasseti ncr easedwi l l be deductandamounti ncr easedbycur r entl i abi l i t ywi l l beaddt ooper at i ngact i vi t i es. Ot her wi se,i ft her e' sandecr easei nbot hcur r entas setandcur r entl i abi l i t i es ,t heamountofcur r entasset decr easedwi l l beaddandamountdecr easedbycur r entl i abi l i t ywi l l bededuct edt ooper at i ngact i vi t i es. I l l ust r at i on-f oroper at i ngact i vi t i esonl y.Thef f .i nf or mat i onwi l l beusedf orbot hmet hod. Si mpl eCompanypr ovi dest hef f .compar at i vest at ementoff i nanci al posi t i onandi ncomest at ementf or201 7. ASSETS 201 6 201 7 Cash Account sr ecei vabl e I nvent or y Pr epai di nsur ance Pr oper t y,pl antandequi pment Accumul at eddepr eci at i on Pat ent TOTALASSETS P1 , 900, 000 350, 000 1 50, 000 25, 000 2, 000, 000 ( 500, 000) 50, 000 P3, 975, 000 P3, 1 00, 000 950, 000 200, 000 20, 000 2, 000, 000 ( 550, 000) 40, 000 P5. 760, 000 P1 50, 000 20, 000 1 5, 000 250, 000 40, 000 500, 000 2, 000, 000 1 , 000, 000 P3, 975, 000 P220, 000 35, 000 1 0, 000 350, 000 90, 000 500, 000 2, 000, 000 2, 555, 000 P5. 760, 000 LI ABI LI TI ESANDEQUI TY Account sPayabl e Accr uedsal ar i espayabl e Accr uedi nt er estpayabl e I ncomet axpayabl e Unear nedr enti ncome Mor t gagepayabl e Shar ecapi t al Ret ai nedear ni ngs TOTALLI ABI LI TI ESANDEQUI TY I ncomeSt at ement Fort heyearendedDecember31 ,201 7 Sal es Costofsal es : I nvent or y-Januar y1 Pur chases Goodsavai l abl ef ors al e I nvent or y-December31 Gr ossi ncome Renti ncome Tot al i ncome Expenses: Sal ar i es I nsur ance Ot herexpenses Depr eci at i on Amor t i zat i onofPat ent I nt er estexpense I ncomebef or et ax I ncomet ax Neti ncome P6, 500, 000 P1 50, 000 3, 200, 000 3, 350, 000 ( 200, 000) P950, 000 40, 000 500, 000 50, 000 1 0, 000 55, 000 1 .Usi ngDi r ectmet hod: Account sr ecei vabl e,begi nni ng Add:Sal es( net ) Less:Account sr ecei vabl e,end Col l ect i onf r om cust omer s Account spayabl e,begi nni ng Add:Pur chases( net ) Less:Account spayabl e,end Paymentt osuppl i er s 350, 000 6, 500, 000 ( 950, 000) P5, 900, 000 1 50, 000 3, 200, 000 ( 220, 000) P3, 1 30, 000 RentI ncome Unear nedr enti ncome,end Unear nedr enti ncome,beg Renti ncomer ecei ved 1 20, 000 90, 000 ( 40, 000) P1 70, 000 Sal ar i es Accr uedsal ar i espayabl e,beg Accr uedsal ar i espayabl e,end Sal ar i espai d 950, 000 20, 000 ( 35, 000) P935, 000 I ncomet ax I ncomet axpayabl e,beg I ncomet axpayabl e,end I ncomet axpai d 350, 000 250, 000 ( 350, 000) P250, 000 I nsur anceexpense Pr epai di nsur ance,end Pr epai di nsur ance,beg I nsur ancepai d 40, 000 20, 000 ( 25, 000) P35, 000 I nt er estexpense Accr uedi nt er estpayabl e,beg Accr uedi nt er estpayabl e,end I nt er estpai d 55, 000 1 5, 000 ( 1 0, 000) P60, 000 ( 3, 1 50, 000) 3, 350, 000 1 20, 000 3, 470, 000 ( 1 , 605, 000) 1 , 865, 000 ( 350, 000) P1 , 51 5, 00 Oper at i ngact i vi t i es Col l ect i onf r om cust omer s Paymentt osuppl i er s Rentr ecei ved Sal ar i espai d I nsur ancepai d I nt er estpai d I nconet axpai d Ot herexpenses Netcashpr ovi dedbyoper at i ngact i vi t i es 5, 900, 000 ( 3, 1 30, 000) 1 70, 000 ( 935, 000) ( 35, 000) ( 60, 000) ( 250, 000) ( 500, 000) P1 , 1 60, 000 2.Usi ngI ndi r ectMet hod Neti ncome Amor t i zat i onofpat ent Depr eci at i on P1 , 51 5, 000 1 0, 000 50, 000 I ncr easei nAccount sr ecei vabl e I ncr easei nI nvent or y Decr easei nPr epai di nsur ance I ncr easei nAccount sPayabl e I ncr easei nAccr uedsal ar i espayabl e Decr easei nAccr uedi nt er estpayabl e I ncr easei nI ncomet axpayabl e I ncr easedi nUnear nedRentI ncome Netcashpr ovi dedbyoper at i ngact i vi t i es ( 600, 000) ( 50, 000) 5, 000 70, 000 1 5, 000 ( 5, 000) 1 00, 000 50, 000 P1 , 1 60, 000 Ast osee,t hecomput ednetcashpr ovi dedbyoper at i ngact i vi t i esi ndi r ectmet hodi sequal i nt heamount comput edi ni ndi r ectmet hod.