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Problem 1: Falcons Limited reported net earnings of $285,000 for the current year. Depreciation expense recorded on buildings and equipment amounted to $92,000 for the year. Balances of the current assets and current liabilities accounts at the beginning and end of the year are as below. Prepare the operating activities section of the cash flow statement using the indirect method
Beginning of year End of year Difference
Cash $15,000 $20,000 Trade receivables 22,500 16,500 Inventories 57,000 52,000 Prepaid expenses 4,000 8,500 Trade payables 18,000 14,000 Income taxes payable 900 1,200
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