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Suppose your company sells services of $370 in exchange for $205 cash and $165 on account.
Required:
1. Prepare the journal entry to record this transaction.
2. Identify the amount that should be reported as net cash flow from operating activities.
3. Identify the amount that would be included in net income.
4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).
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