B C D E G Operating expenses payable 45,000 32,300 Interest payable 250 7,500 Income taxes payable 175 9.000 Total Current Liabilities 135,425 214,000 Notes payable-due in 2025 18,775 322.500 Total Liabilities 154,200 536.500 Preferred Stock 310,000 310,000 Additional Paid in Capital-Preferred Stock 325.000 325,000 Common Stock 710,000 650,000 Additional Paid in Capital-Common Stock 160,000 150,000 Retained earnings 1.044,900 617,850 Total Stockholders Equity 2,549,900 ,052,850 Total Liabilities and Stockholders Equity 2.704,100 2.589,350 Scruggs Inc. Income Statement For the Year Ended December 31, 2021 Sales 1,500,000 Cops 850,000 Gross profit 650,000 Operating expenses 90.000 Depreciation expense 70,000 Depletion expense 7,500 Amortization expense 2,500 Operating income 480,000 Loss on sale of stock 6.500 Gain on sale of bonds 12,000 Gain on sale of equipment 5,000 Interest expense (3,500 Income tax expense (12,500) Net income 474,500 Instructions: 1. Prepare a Statement of Cash Flows using the indirect method for the Year Ended December 31, 2021. 2. Prepare the operating section of the statement of cash flows using the direct method for the Year Ended December 31, 2021. Additonal information: 1. Purchased $50,000 of Equipment by issuing $20,000 of Common Stock and paying $30,000 of cash 2. Sold equipment with a cost of $40,000 and Accumulated Depreciation of $10,000 3. Sold common stock for cashScruggs Inc. Balance Sheet December 31, 2021 2020 Current Assets Cash 92,500 15.750 Accounts Receivable 125,000 90,000 Inventory 250.000 125.000 Prepaid Expenses 4.500 6,500 Total Current Assets 472,000 237,250 Long-Term Investments Investments in Stock 65,000 85,000 Investments in Bonds 35.000 75,000 Total Long-Term Investments 100.000 160,000 Property, Plant and Equipment Land 450,000 450,000 Buildings 650.000 650.000 Accumulated Dep-Buildings (191,400) (158,900) Equipment 110,750 100,750 Accumulated Dep-Equipment (50,000) 35,000) Vehicles 45,000 5.000 Accumulated Dep-Vehicles (17,250) (4,750) Coal Mine 1,200,000 1,200,000 Accumulated Depletion-Coal Mine (127,500) (120,000) Total PP & E 2,069,600 2,127,100 Intangibles Patent 62.500 $5,000 Total Assets 2.704,100 4589,350 Current liabilities Accounts payable 90,000 165,000 Operating expenses payable 45,000 32.500 Interest payable 250 7,500 Income taxes payable 175 9.000 Total Current Liabilities 135,425 214,000 Notes payable-due in 2025 18,775 322,500 Total Liabilities 154,200 536,500 Preferred Stock 310.000 310,000 Additional Paid in Capital-Preferred Stock 325,000 325,000 Common Stock 710,000 650,000 Additional Paid in Capital-Common Stock 160.000 150,000 Retained earnings 1,044,900 617.850 Total Stockholders Equity 2.549,900 2.052,850 Total Liabilities and Stockholders Equity 2.704,100 2,589,350