Volkswagen uses the direct method to prepare its statement of cash flows.

Volkswagen provided the comparative data and additional information:

31-Dec 2017 2018

Cash P 300,000 P 200,000
Accounts Receivable, net 840,000 580,000
Inventory 660,000 420,000
Prepaid expenses 100,000 50,000
Long term investment 80,000 -
Property, plant and equipment 1,130,000 600,000
Accumulated Depreciation 110,000 50,000
Accounts payable 530,000 440,000
Accrued expense 140,000 130,000
Dividends payable 70,000 -
Note payable- long term debt 500,000 -
Share capital 1,200,000 900,000
Retained earnings 560,000 330,000
Net credit sales 6,400,000 4,000,000
Cost of goods sold 5,000,000 3,200,000
Expenses 1,000,000 520,000
Net income 400,000 280,000

All accounts receivable and accounts payable relates to trade merchandise. Accounts payable are recorded net at the end of 2017 was the same as at the end of 2016.
No receivable were charged against the allowance during 2017. The proceeds from the note payable were used to finance a new store building. Share capital was sold to provide additional working capital.