Zachary Brands, Inc. Zachary, presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Zachary's 2017 and 2016 year-end balance sheets: Account Title Accounts receivable Merchandise inventory Prepaid insurance Mccounts payable Salaries payable Unearned service revenue 2017 $21,600 57,800 15,000 24,400 4,950 1,000 2016 $29,900 49,200 25,200 17.500 4,200 3,050 The 2017 income statement is shown below: Income Statement Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of equipment Net income $ 607,000 (383,000) 224,000 5. 100 (39,000) (156.000) 15,700) 28.400 4.200 $ 32.600 Required a. Prepare the operating activities section of the statement of cash flows using the direct method. b. Prepare the operating activities section of the statement of cash flows using the indirect method. 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.) ZACHARY BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, 2017 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 Required > Required A Required B 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.) ZACHARY BRANDS, INC Statement of Cash Flows (Operating Activities) For the Year Ended December 31, 2017 Cash flows from operating activities: Add: noncash expenses Net cash flow from operating activities