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The following summarized income statement and additional selected information for Midway Limited:

The following summarized income statement and additional selected information for Midway Limited: Income Statement
  1. Revenues $150,800
  2. Cost of sales (55,500)
  3. Gross margin 95,300
  4. Salary expense (55,400)
  5. Depreciation (33,305)
  6. Other expense (9,600)
  7. Net loss before tax (3,005)
  8. Income tax expense (1,500)
  9. Net loss $ (4,505)



  • Other information: Decrease in receivables $ 800
  • Decrease in inventories 230
  • Increase in prepaid expenses 1,500
  • Increase in accounts payable 1,750
  • Decrease in accrued liabilities 602
  • Increase in income taxes payable 1,280
Required: Based on this information, compute cash flow from operating activities using the direct method. Assume that prepaid expenses and accrued liabilities relate to other expense. Please provide detail calculations. 
 

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