Comparative balance sheet accounts of Marcus Inc. are presented below.

Additional data (ignoring taxes):1. Net income for the year was $42,500.2. Cash dividends declared and paid during the year were $21,125.3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized.4. Investments that cost $25,000 were sold during the year for $28,750.5. Machinery that cost $3,750, on which $750 of depreciation had accumulated, was sold for $2,200.Marcus's 2012 income statement follows (ignoring taxes).

Instructions(a) Compute net cash flow from operating activities using the direct method.(b) Prepare a statement of cash flows using the indirectmethod.

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MARCUS INC. COMPARATIVE BALANCE SHEET ACCOUUNTS As OF DECEMBER 31, 2012 AND 2011 December 31 Debit Accounts 2012 2011 $ 42,000 $ 33,750 Cash Accounts Receivable Inventory Investments (available-for-sale) Machinery Buildings Land 70,500 30,000 22,250 30,000 67,500 7,500 $269,750 60,000 24,000 38,500 18,750 56,250 7,500 $238,750 Credit Accounts $ 2,250 5,625 13,500 35,000 3,375 21,000 150,000 39,000 $ 1,500 Allowance for Doubtful Accounts Accumulated Depreciation-Machinery Accumulated Depreciation-Buildings Accounts Payable Accrued Payables Long-Term Notes Payable Common Stock, no-par Retained Earnings 2,250 9,000 24,750 2,625 31,000 125,000 42,625 $269,750 $238,750