Comparative balance sheet accounts of Marcus Inc. are presented below. MARCUS INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,000 $33,750 Accounts Receivable 70,500 60,000 Inventory 30,000 24,000 Equity investments 22,250 38,500 Machinery 30,000 18,750 Buildings 67,500 56,250 Land 7,500 7,500 $269,750 $238,750 Credit Accounts Allowance for Doubtful Accounts $2,250 $1,500 Accumulated Depreciation Machinery 5,625 2,250 Accumulated Depreciation Buildings 13,500 9,000 Accounts Payable 35,000 24,750 Accrued Payables 3,375 2,625 Long-Term Notes Payable 21,000 31,000 Common Stock, no-par 150,000 125,000 Retained Earnings 39,000 42,625 $269,750 $238,750 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. , A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $25,000 were sold during 4. the year for $28,750. No unrealized gains and losses were recorded on these investments in 2017. Machinery that cost $3,750, on which $750 of depreciation had accumulated, was sold for $2,200. Marcus's 2017 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8,625 depreciation and $5,400 bad debts) Income from operations Other: Gain on sale of investments Loss on sale of machinery Net income $540,000 380,000 160,000 120,450 39,550 $3,750 (800) 2,950 $42,500 (a) Compute net cash flow from operating activities using the direct method. (b) Prepare a statement of cash flows using the indirect method