Editing in the Timeline
For short clips it is just as easy to edit inside the Time Line as it is in the Source Monitor. I usually do this in any case because it saves a step especially if you are laying and editing clips in sequence.
1) With your project open grab and drag the clip that you want to edit directly into the time line as opposed to double clicking to open the clip in the source monitor.
2)You can now use the arrow tool (V) and the razor tool (C) to drag the ends of the clip or cut from the middle. This does the same thing as setting in and out points in the source monitor then dragging the clip into the time line.