Comparative statement of financial position accounts of Marcus AG are presented below.

Additional data (ignoring taxes):

1. Net income for the year was €42,500.

2. Cash dividends declared and paid during the year were €21,125.

3. A 20% share dividend was declared during the year. €25,000 of retained earnings was capitalized.

4. Equity investments that cost €25,000 were sold during the year for €28,750.

5. Machinery that cost €3,750, on which €750 of depreciation had accumulated, was sold for €2,200.

Marcus's 2019 income statement follows (ignoring taxes).

Instructions

a. Compute net cash flow from operating activities using the direct method.

b. Prepare a statement of cash flows using the indirect method?