Fanning Brands, Inc., presents its statement of cash flows using the Indirect method. The following accounts and corresponding balances were drawn from Fanning's Year 2 and Year 1 year-end balance sheets: Account Title Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue Year 2 Year 1 520,500 $27, 100 59,000 48,60e 19,000 26,500 25,000 16,800 4,900 4,150 2,850 850 The Year 2 income statement is shown below: es Income Statement Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of equipment Net income $ 610,000 (369,880) 241,000 4.ee (38,000) (141,000) (5,200) 60,800 4,700 $ 65,500 Required 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. Required 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. nok Required A Required B nt ances Prepare the operating activities section of the statement of cash flows using the direct method. (Cash outflows should be Indicated with minus sign.) FANNING 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: Inventory Insurance Salaries Net cash flow from operating activities $ 0 he Required > 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.). FANNING 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 Net cash flow from operating activities $ 0 (Required A