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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 sales of $360,000 and $200,000 and cost of goods sold of $150,000 and $95,000, respectively. Power’s inventory increased by $33,000, but Surge’s decreased by $15,000. Power’s accounts receivable increased by $19,000 and its accounts payable decreased by $19,000 during 20X4. Surge’s accounts receivable decreased by $14,000 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:
  

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 $360,000 and $200,000 and cost of goods sold of $150,000 and $95,000, respectively. Power’s inventory increased by $33,000, but Surge’s decreased by $15,000. Power’s accounts receivable increased by $19,000 and its accounts payable decreased by $19,000 during 20X4. Surge’s accounts receivable decreased by $14,000 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 payment to suppliers

C. Cashflow from operating activities

Answer
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