Question
Power Corporation owns 75 percent of Surge Companys stock; no intercompany purchases or sales were made in 20X4. For the year, Power and Surge reported
Power Corporation owns 75 percent of Surge Companys stock; no intercompany purchases or sales were made in 20X4. For the year, Power and Surge reported sales of $330,000 and $210,000 and cost of goods sold of $150,000 and $99,750, respectively. Powers inventory increased by $21,000, but Surges decreased by $12,000. Powers accounts receivable increased by $25,000 and its accounts payable decreased by $14,000 during 20X4. Surges accounts receivable decreased by $11,000 and its accounts payable increased by $7,000. Required: Assuming there were no other cash flows from operations, using the direct method of computing cash flows from operating activities, compute the following: Cash Received from Customers Cash Payments to suppliers Cash Flow from operating activites
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