BRIEF EXERCISE 13A–1 Net Cash Provided by Operating Activities (Direct Method) [LO5]

Refer to the data for Hanna Company in Brief Exercise 13–2. The company’s income statement for the year appears below:

Sales ................................................................... $350,000 Cost of goods sold .............................................. 140,000 Gross margin ...................................................... 210,000 Selling and administrative expenses .................. 160,000 Income before taxes ........................................... 50,000 Income taxes ....................................................... 15,000 Net income .......................................................... $ 35,000 Required:

Using the direct method (and the data from Brief Exercise 13–2), convert the company’s income statement to a cash basis.