Green Brands, Inc. (GBI), presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from GBI's 2014 and 2013 year-end balance sheets:

The 2014 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
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 indirectmethod.

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Account Title 2014 2013 Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue $48,000 78,000 24,000 31,000 8,200 2,400 $52,000 72,000 32,000 28,000 7,800 3,600