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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
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 $310,000 and $240,000 and cost of goods sold of $180,000 and $114,000, respectively. Power's inventory increased by $25,000, but Surge's decreased by $12,000. Power's accounts receivable increased by $26,000 and its accounts payable decreased by $13,000 during 20X4. Surge's accounts receivable decreased by $11,000 and its accounts payable increased by $4,000. 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. Cash flows from operating activities
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