You are given two consecutive balance sheets, an income statement, and a few facts for A Cruel World Inc.

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.)

c. State what is possible (with the data at hand) to know about cash purchases of inventory for A Cruel World in year 1

Balance Sheets (years 0 and 1) Year 0 3,000 Cash Accounts Receivables 2,000 3,000 Inventory Property, Plant and Equipment (net) 12.000 Total Assets 20.000 7,000 Accounts Payable Bonds Payable 5,000 Total Liabilities 12,000 Common Stock 3,000 Retained Earnings 5.000 8.000 Total Shareholders' Equity Total Liabilities and Equity 20.000 Year 1 3,000 4,000 4,000 11,000 22.000 5,000 6,000 11,000 4,000 7,000 11,000 22.000