Adams Brands, Inc., presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Adams's Year 2 and Year 1 year-end balance sheets: Account Title Year 2 Accounts receivable $22,700 Year 1 $28,500 Merchandise inventory 60,000 48,000 Prepaid insurance 18,000 24,500 Accounts payable 25,600 18,300 Salaries payable 4,750 4,000 Unearned service revenue 900 2,950 The Year 2 income statement is shown below: Income Statement Sales $ 619,000 Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense (379,000) 240,000 5,200 (40,000) (152,000) Depreciation expense Operating income (5,700) 47,500 Gain on sale of equipment Net income Required 3,600 $ 51,100 a. Prepare the operating activities section of the statement of cash flows using the direct method. b. Prepare the operating activities section of the statement of cash flows using the indirect method. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the operating activities section of the statement of cash flows using the direct method. (Cash outflows should be indicated with minus sign.) ADAMS BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Cash collections from customers for sales Cash collections from customers for services Cash payments for: Net cash flow from operating activities $ 0 < Required A Required B > Complete this question by entering your answers in the tabs below. Required A Required B Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) ADAMS BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Add: Deduct: Add: noncash expenses