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Jordan Brands, Incorporated, presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Jordan s Year

Jordan Brands, Incorporated, presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Jordans Year 2 and Year 1 year-end balance sheets. Assume that Accounts Payable is used for purchases of inventory only.
Account Title Year 2 Year 1
Accounts receivable $23,500 $29,000
Merchandise inventory 57,10051,000
Prepaid insurance 17,00025,800
Accounts payable 23,40018,300
Salaries payable 4,7503,900
Unearned service revenue 6503,050
The Year 2 income statement is shown below:
Income Statement
Sales $612,000
Cost of goods sold (369,000)
Gross margin 243,000
Service revenue 4,500
Insurance expense (39,000)
Salaries expense (151,000)
Depreciation expense (4,800)
Operating income 52,700
Gain on sale of equipment 4,100
Net income $56,800
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.

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