Green Brands, Inc. (GBI) presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from GBI'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 $ 22,800 59,700 15,900 25,100 4,950 950 Year 1 $ 29,300 51,800 27,800 18,400 4,150 2,700 The Year 2 income statement is shown next: Income Statement Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of equipment $ 616,000 (364,000) 252,000 4,500 (39,000) (145,000) (5,700) 66,800 4,600 $ 71,400 Net income b. Prepare the operating activities section of the statement of cash flows using the indirect me Year 2. (Amounts to be deducted should be indicated with a minus sign.) GREEN BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Net income $ 71,400 Add: Increase in accounts receivable 6,500 11,900 Increase in prepaid insurance Increase in accounts payable Increase in salaries payable 6,700 800 Deduct: Decrease in merchandise inventory Decrease in unearned service revenue (7,900) (1,750) Add: noncash expenses Depreciation expense (5,700) Net cash flow from operating activities $ 81,950