Comparative statement of financial position 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% share dividend was declared during the year. €25,000 of retained earnings was capitalized.
4. Equity 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 2015 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 indirect method.

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MARCUS INC. COMPARATIVE STATEMENT OF FINANCIAL POSITION ACCOUNTS AS OF DECEMBER 31, 2015 AND 2014 Debit Accounts Cash Accounts Receivable Inventory Equity Investments (non-trading) Machinery Buildings Land December 31 2015 2014 42,000 33,750 70,500 60,000 30,000 24,000 22,250 38,500 30,000 18,750 67,500 56,250 7,500 7,500 269,750 238,750 Credit Accounts Allowance for Doubtful Accounts 2,250 1,500 Accumulated Depreciation-Machinery 5,625 2,250 Accumulated Depreciation-Buildings 13,500 9,000 Accounts Payable 35,000 24,750 Accrued Payables 3,375 2,625 Long-Term Notes Payable 21,000 31,000 Share Capital-Ordinary, no par 150,000 125,000 Retained Earnings 39,000 42,625 269,750 238,750