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    Indirect Statement of Cash Flows Creation

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    Villa Company reported net income of $195,000 for 2010. Villa also reported depreciation expense of $45,000 and a loss of $5,000 on the sale of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses.

    Instructions:
    Prepare the operating activities section of the statement of cash flows for 2010. Use the indirect method.

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    Solution Summary

    This solution provides assistance in preparing the operating activities section of the statement of cash flows for 2010 using the indirect method.

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