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Gainesville Corporation's income statement revealed sales of $700,000; gross profit of $300,000; selling and administrative costs of $140,000; and income taxes of $45,000. The selling
Gainesville Corporation's income statement revealed sales of $700,000; gross profit of $300,000; selling and administrative costs of $140,000; and income taxes of $45,000. The selling and administrative expenses included $10,000 for depreciation. The company's operating activities generated positive cash flow of $129,000. Use the "indirect" approach to demonstrate how this amount was calculated. The following additional information is available: | ||||
Beginning-of-Period Balance | End-of-Period Balance | |||
Account receivable | $70,000 | $82,000 | ||
Inventory | 50,000 | 41,000 | ||
Accounts payable | 37,000 | 44,000 | ||
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