Please give a complete answer and do not reference other postings, as those answers are incorrect. Thank you very much!!

Please give a complete answer and do not reference other postings, as those answers are incorrect. Thank you very much!!

You are given two consecutive balance sheets, an income statement, and a few facts for A Cruel World, Inc. Balance Sheets (years 0 and 1) Year 0 Year 1 Cash 3,000 3,000 Accounts Receivables 2.000 4.000 Inventory 3,000 4,000 Property, Plant and Equipment (net) 12.000 11,000 Total Assets 20.000 22.000 Accounts Payable 7.000 5,000 Bonds Payable 5.000 6,000 Total Liabilities 12,000 11,000 Common Stock 3,000 4,000 Retained Earnings 5,000 7,000 Total Shareholders' Equity 8,000 11,000 Total Liabilities and Equity 20.000 22.000 Income Statement (year 1) Sales 20,000 Costs of Goods Sold (8,000) Wage Expense (4,000) Depreciation Expense (2,000) Interest Expense (1,000 Net Income Before Tax 5,000 Tax Expense (2.000) Net Income 3.000 Facts All property, plant and equipment that is retired or sold is fully depreciated. Purchases of property, plant and equipment were made in cash. Interest expense increases the Interest Payable Account. Required: a. Construct the Statement of Cash Flows for A Cruel World in year 1 using the direct method. b. Construct the supporting schedule to the Statement of Cash Flows which reconciles net income to cash flow from operations for A Cruel World in year 1. (That is, calculate cash flow from operations using the indirect method.)