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Power Corporation owns 75 percent of Surge Company's stock; no intercompany purchases or sales were made in 20X4. For the year, Power and Surge reported
Power Corporation owns 75 percent of Surge Company's stock; no intercompany purchases or sales were made in 20X4. For the year, Power and Surge reported sales of $390,000 and $220,000 and cost of goods sold of $160,000 and $104,500, respectively. Power's inventory increased by $33,000, but Surge's decreased by $14,000. Power's accounts receivable increased by $19,000 and its accounts payable decreased by $16,000 during 20X4. Surge's accounts receivable decreased by $9,000 and its accounts payable increased by $5,000 Required: Assuming there were no other cash flows from operations, using the direct method of computing cash flows from operating activities compute the following: a. Cash received from customers b. Cash payments to suppliers C. I Cash flows from operating activities S 572,000 S 304,500 S 267,500
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