Question
Power Corporation owns 75 percent of Turk Companys stock; no intercompany purchases or sales were made in 20X4. For the year, Power and Turk reported
Power Corporation owns 75 percent of Turk Companys stock; no intercompany purchases or sales were made in 20X4. For the year, Power and Turk reported sales of $390,000 and $210,000 and cost of goods sold of $180,000 and $99,750, respectively. Powers inventory increased by $20,000, but Turks decreased by $19,000. Powers accounts receivable increased by $21,000 and its accounts payable decreased by $13,000 during 20X4. Turks accounts receivable decreased by $10,000 and its accounts payable increased by $6,000.
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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