Required: Prepare the Statement of Cash Flows for Rich Corp using the INDIRECT method by completing the worksheet below. Prepare the Statement of Cash Flows for RichCorp using the DIRECT method by completing the worksheet below. Be sure to indicate in which section of the statement each should be shown. Rich Corp Income Statement 2 EYE 12/31/20 3 4 Revenues 2,670,000 15 Cost of Goods Sold (1,395,000) 6 Operating Expenses (663,000) 7 Interest Expense (36,000) 18 Loss on sale of equipment (6,000) (2,100,000) 19 Income before income taxes 570,000 20 Income tax expense (195,000 21 Net Income 375,000 22 23 Additional Information relating to 2020 activities: 24 Cash dividends of $165,000 were declared and paid 25 Equipment costing $123,000 and having a carrying value of $108,000, was sold for $102,000 cash 26 Equipment with a cost of $498,000 was purchased for cash 27 Operating expenses include depreciation expense of $99,000 and amortization of prepaid expenses of $6,000 28 Land was sold at its book value for cash 29 Interest expense of $36,000 was paid in cash 30 Common stock was issued for cash 31 Inventory was purchased on credit 32 Assume operating expenses are paid in cash 33 34 INDIRECT METHOD Debits Credits Cash Accounts Receivable Inventory Prepaid Insurance Land Buildings Equipment 12/31/19 111,000 78,000 0 18,000 210,000 600,000 204,000 1,221,000 12/31/20 162,000 204,000 162,000 12,000 135,000 600,000 579,000 1,854,000 Accumulated Depreciation, B Accumulated Depreciation, Accounts Payable Bonds Payable 1 Common Stock ($1 par) 2 Retained Earnings 3 4 ES 66 Cash Flow Section INDIRECT method: 57 58 33,000 30,000 120,000 450,000 180,000 408,000 1,221,000 63,000 84,000 99,000 330,000 660,000 618,000 1,854,000