$ 2,400 1,200 1,200 Sales Cost of goods sold Gross margin Selling and administrative expenses Income before taxes Income taxes Net income 300 900 360 540 $ The company's selling and administrative expense for Year 2 includes $74 of depreciation expense. Selected balance sheet accounts for Wiley at the end of Years 1 and 2 are as follows: Year 2 Year 1 $210 $150 $ 36 $245 $200 $ 23 Current Assets Accounts receivable Inventory Prepaid expenses Current Liabilities Accounts payable Accrued liabilities Income taxes payable $101 $ 13 $122 $ 81 $ 28 $ 70 Required: 1. Using the direct method, convert the company's income statement to a cash basis. 2. Assume that during Year 2 Wiley had a $11,000 gain on sale of investments and a $4,000 loss on the sale of equipment. Would these transactions affect the computation in (1) above? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the direct method, convert the company's income statement to a cash basis. (Adjustment amounts deducted should be indicated with a minus sign.) Wiley Company Direct Method of Determining the Net Cash flows from Operating activities Adjustments to a cash basis: Adinctmante to a rach hacie