Green Brands, Inc. (GBI) presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from GBIs Year 2 and Year 1 year-end balance sheets:

Account Title	Year 2				Year 1
Accounts receivable	$	23,700			$	28,600
Merchandise inventory		58,900				50,300
Prepaid insurance		16,000				27,400
Accounts payable		25,900				19,400
Salaries payable		4,850				4,050
Unearned service revenue		650				2,850

The Year 2 income statement is shown next:

Income Statement
Sales	$	614,000
Cost of goods sold		(372,000	)
Gross margin		242,000
Service revenue		4,400
Insurance expense		(40,000	)
Salaries expense		(148,000	)
Depreciation expense		(4,800	)
Operating income		53,600
Gain on sale of equipment		4,000
Net income	$	57,600

b. Prepare the operating activities section of the statement of cash flows using the indirect method for Year 2. (Amounts to be deducted should be indicated with a minus sign.)

66 b. Prepare the operating activities section of the statement of cash flows using the indirect method for Year 2. (Amounts to be deducted should be indicated with a minus sign.) 10 points 00:40:21 GREEN BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Net income Add: Decrease in accounts receivable Decrease in prepaid insurance Increase in accounts payable Deduct: Increase in merchandise inventory Decrease in unearned service revenue Add: noncash expenses Increase in salaries payable Net cash flow from operating activities $ 0