\begin{tabular}{|l|r|} \hline & \multicolumn{2}{c}{\begin{tabular}{c} Scruggs Inc. \\ \hline \end{tabular}} & Income Statement \\ \hline & For the Year Ended December \\ \hline Sales & 1,500,000 \\ \hline Cogs & 850,000 \\ \hline Gross profit & 650,000 \\ \hline & \\ \hline Operating expenses & 90,000 \\ \hline Depreciation expense & 70,000 \\ \hline Depletion expense & 7,500 \\ \hline Amortization expense & 2,500 \\ \hline Operating income & 480,000 \\ \hline & \\ \hline Loss on sale of stock & (6,500) \\ \hline Gain on sale of bonds & 12,000 \\ \hline Gain on sale of equipment & 5,000 \\ \hline Interest expense & (3,500) \\ \hline Income tax expense & (12,500) \\ \hline D & \\ \hline Net income & 474,500 \\ \hline \end{tabular} 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 cash \begin{tabular}{|l|r|} \hline & \multicolumn{2}{c}{\begin{tabular}{c} Scruggs Inc. \\ \hline \end{tabular}} & Income Statement \\ \hline & For the Year Ended December \\ \hline Sales & 1,500,000 \\ \hline Cogs & 850,000 \\ \hline Gross profit & 650,000 \\ \hline & \\ \hline Operating expenses & 90,000 \\ \hline Depreciation expense & 70,000 \\ \hline Depletion expense & 7,500 \\ \hline Amortization expense & 2,500 \\ \hline Operating income & 480,000 \\ \hline & \\ \hline Loss on sale of stock & (6,500) \\ \hline Gain on sale of bonds & 12,000 \\ \hline Gain on sale of equipment & 5,000 \\ \hline Interest expense & (3,500) \\ \hline Income tax expense & (12,500) \\ \hline D & \\ \hline Net income & 474,500 \\ \hline \end{tabular} 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 cash \begin{tabular}{|l|r|} \hline & \multicolumn{2}{c}{\begin{tabular}{c} Scruggs Inc. \\ \hline \end{tabular}} & Income Statement \\ \hline & For the Year Ended December \\ \hline Sales & 1,500,000 \\ \hline Cogs & 850,000 \\ \hline Gross profit & 650,000 \\ \hline & \\ \hline Operating expenses & 90,000 \\ \hline Depreciation expense & 70,000 \\ \hline Depletion expense & 7,500 \\ \hline Amortization expense & 2,500 \\ \hline Operating income & 480,000 \\ \hline & \\ \hline Loss on sale of stock & (6,500) \\ \hline Gain on sale of bonds & 12,000 \\ \hline Gain on sale of equipment & 5,000 \\ \hline Interest expense & (3,500) \\ \hline Income tax expense & (12,500) \\ \hline D & \\ \hline Net income & 474,500 \\ \hline \end{tabular} 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 cash \begin{tabular}{|l|r|} \hline & \multicolumn{2}{c}{\begin{tabular}{c} Scruggs Inc. \\ \hline \end{tabular}} & Income Statement \\ \hline & For the Year Ended December \\ \hline Sales & 1,500,000 \\ \hline Cogs & 850,000 \\ \hline Gross profit & 650,000 \\ \hline & \\ \hline Operating expenses & 90,000 \\ \hline Depreciation expense & 70,000 \\ \hline Depletion expense & 7,500 \\ \hline Amortization expense & 2,500 \\ \hline Operating income & 480,000 \\ \hline & \\ \hline Loss on sale of stock & (6,500) \\ \hline Gain on sale of bonds & 12,000 \\ \hline Gain on sale of equipment & 5,000 \\ \hline Interest expense & (3,500) \\ \hline Income tax expense & (12,500) \\ \hline D & \\ \hline Net income & 474,500 \\ \hline \end{tabular} 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 cash