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Back Cove Company has the following comparative balance sheets and income statement:                             &

Back Cove Company has the following comparative balance sheets and income statement:

                                                      2017                                          2016

Cash                                           $10,000                                   $15,000
Receivables 11,000                                      10,000
Inventories 22,000                                      18,000
Other Assets (net) 20,000                                      30,000
                                                      $63,000                                   $73,000

Accounts Payable $10,000 $20,000
Capital Stock $20,000 16,000
Retained Earnings 33,000 37,000
$63,000                                   $73,000

Sales                                                                              $110,000
Cost of Sales 72,000
Gain on sale of Assets 2,000
Expenses 16,000
Income $ 24,000

Depreciation expense was $5,000.   A machine with a cost of $19,000 and book value of $13,000 was sold which produced the gain on sale of assets. Other assets were purchased for cash during the year, a dividend paid, and stock was issued for $4,000.

(1) Using the Indirect Method, prepare a cash flow statement.

(2) Assuming all operating expenses are paid for in cash and all inventory purchases are made on account, prepare cash from operations using the Direct Method.

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