The comparative year-end balance sheets of Sign Graphics, Inc., revealed

Cash flow information: Direct and indirect methods The comparative year-end balance sheets of Sign Graphics, Inc., revealed the following activity in the company’s current accounts: 20X5 20X4Increase / Decrease) Current assets   Cash$55,400$35,200$20,200 Accounts receivable (net)83,80088,000-4,200 Inventory243,400233,8009,600 Prepaid expenses25,40024,2001,200      Current liabilities    Accounts payable$123,600$140,600($17,000) Taxes payable43,60049,200-5,600 Interest payable9,0006,4002,600 Accrued liabilities38,80060,400-21,600 Note payable44,000—44,000      The accounts payable were for the purchase of merchandise. Prepaid expenses and accrued liabilities relate to the firm’s selling and administrative expenses. The company’s condensed income statement follows.SIGN GRAPHICS INC.Income Statementfor the Year Ended December 31, 20×5         Sales      $713,800 Less: Cost of goods sold    323,000 Gross profit     $390,800          Less: Selling & administrative expenses $186,000   Depreciation expense    17,000        Interest expense      27,000 230,000          Add: gain on sale of land    $160,800        21,800 Income before taxes    $182,600 Income taxes     36,800 Net income     $145,800          Other data:Long-term investments were purchased for cash at a cost of $74,600.Cash proceeds from the sale of land totaled $76,200.Store equipment of $44,000 was purchased by signing a short-term note payable. Also, a $150,000 telecommunications system was acquired by issuing 3,000 shares of preferred stock.A long-term note of $49,400 was repaid.Twenty thousand shares of common stock were issued at $5.19 per share.The company paid cash dividends amounting to $128,600.Instructions: 1. Prepare the operating activities section of the company’s statement of cash flows, assuming use of:The direct method.The indirect method2. Prepare the investing and financing activities sections of the statement of cash flows.