Direct versus indirect method of determining cash flows from operating activities Master Mechanics, Inc. (MMI), recognized $1,200 of sales revenue on account and collected $1,100 of cash from accounts receivable. Further, MMI recognized $700 of operating expenses on account and paid $500 cash as partial settlement of operating expenses payable.

Required

Based on this information alone:

a. Prepare the operating activities section of the statement of cash flows under the direct method. b. Prepare the operating activities section of the statement of cash flows under the indirect method