Scruggs Inc. Income Statement For the Year Ended December 31, 2018 Sales Cogs Gross profit 1,500,000 850,000 650,000 Operating expenses Depreciation expense Depletion expense Amortization expense Operating income 90,000 70,000 7,500 2,500 480,000 Loss on sale of stock Gain on sale of bonds Gain on sale of equipment Interest expense Income tax expense (6,500) 12,000 5,000 (3,500) (12,500) Net income 474,500 Prepare a full statement of cash flows using the indirect method Prepare the operating section of the statement of cash flows using the direct method Comment on the amount of the dividend payout Comment on areas of opportunity 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 Scruggs Inc. Income Statement For the Year Ended December 31, 2018 Sales Cogs Gross profit 1,500,000 850,000 650,000 Operating expenses Depreciation expense Depletion expense Amortization expense Operating income 90,000 70,000 7,500 2,500 480,000 Loss on sale of stock Gain on sale of bonds Gain on sale of equipment Interest expense Income tax expense (6,500) 12,000 5,000 (3,500) (12,500) Net income 474,500 Prepare a full statement of cash flows using the indirect method Prepare the operating section of the statement of cash flows using the direct method Comment on the amount of the dividend payout Comment on areas of opportunity 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