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	$	48,000			$	52,000
Merchandise inventory		78,000				72,000
Prepaid insurance		24,000				32,000
Accounts payable		31,000				28,000
Salaries payable		8,200				7,800
Unearned service revenue		2,400				3,600

The Year 2 income statement is shown below:

Income Statement
Sales	$	720,000
Cost of goods sold		(398,000	)
Gross margin		322,000
Service revenue		6,000
Insurance expense		(36,000	)
Salaries expense		(195,000	)
Depreciation expense		(12,000	)
Operating income		85,000
Gain on sale of equipment		4,500
Net income	$	89,500

Required

Prepare the operating activities section of the statement of cash flows using the direct method.

Prepare the operating activities section of the statement of cash flows using the indirect method.