Problem 14-14A (Algo) The direct versus the indirect method of determining cash flow from operating activities LO 14-1, 14-2 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 Year 2 Year 1 Accounts receivable $20,600 $27,600 Merchandise inventory 56,600 50.600 Prepaid insurance 16,000 24,100 Accounts payable 26.600 I 18,900 Salaries payable 4,750 4,200 Unearned service revenue 950 2,750 The Year 2 income statement is shown below: Income Statement Sales Cost of goods sold GROSS Bargin Service revenue Insurance expense Salaries sense Depreciation expense Operating income Gain on sale et euipment Net Income $ 619,000 1378,000) 241,000 5.200 39.000) (155,000 15.100 47.100 $51.400 Required a. Prepare the operating activities secuon of the statement of cash flows using the direct method b. Prepare the operating activities section of the statement of cash rows using the Indirect method help MILY MEMET. Complete this question by entering your answers in the tabs below. Required A Required B 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. Statument 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 Net cash flow from operating activities $ Hequired EU 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 $ 0 Net cash flow from operating activities Required A