The profit or loss section of the statement of comprehensive income of Reek Company for the year ended December 31, 2020 is reproduced below: Sales P 6,100,000 Cost of goods sold 3,700,000 Gross profit P2,400,000 Gain on sale of equipment 100,000 Salaries expense -820,000 Insurance expense -380,000 Depreciation expense 220,000 Profit before interest and income tax P1,080,000 Interest expense 120,000 Profit before income tax P960,000 Income tax expense 288,000 Profit P672,000 The following information is also available: Decrease in accounts receivable P120,000 Increase in inventory 280,000 Decrease in accounts payable 160,000 Increase in salaries payable 100,000 Increase in prepaid insurance 180,000 Decrease in interest payable 30,000 Increase in income tax payable 18,000 Required: Prepare Reek Company’s 2020 Statement of Cash Flows using the direct method and Indirect Method.
The profit or loss section of the statement of comprehensive income of Reek Company for the year ended December 31, 2020 is reproduced below:
Sales P 6,100,000
Cost of goods sold 3,700,000
Gross profit P2,400,000
Gain on sale of equipment 100,000
Salaries expense -820,000
Insurance expense -380,000
Profit before interest and income tax P1,080,000
Interest expense 120,000
Profit before income tax P960,000
Income tax expense 288,000
Profit P672,000
The following information is also available:
Decrease in
Increase in inventory 280,000
Decrease in accounts payable 160,000
Increase in salaries payable 100,000
Increase in prepaid insurance 180,000
Decrease in interest payable 30,000
Increase in income tax payable 18,000
Required: Prepare Reek Company’s 2020 Statement of
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