8 Mary Walker, president of Rusco Company, considers $32,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $27,000 in cash was available at the end of this year. Since the company reported a large net income for the year, and also issued both bonds and common stock, the sharp decline in cash is puzzling to Ms. Walker Rusco Company Comparative Balance Sheet at July 31 points Skipped This Year Last Year-11 Assets Current assets: Cash Accounts receivable Inventory Prepaid expenses $ 27,00047,400 225,600 eBook 214,400 260,800 15,400 517,606 126,000 884,980 216,900 668,800 283,280 Print 29,400 Total current assets Long-term investments Plant and equipment 505,60e 180,006 762,000 193,600 568,400 References Less accumulated depreciation Net plant and equipment Total assets Liabilities and Stockholders Equity Current liabilities: 1,311,600 S1,254,000 Accounts payable s185,80 243,200 17,400 45,000 85,600 124,000 429,600 Accrued liabilities 9,200 Income taxes payable Total current 1iabilities Bonds payable Total 1iabilities Stockholders' equity: 51,600 246,600 236,00 482,600 660,000 164,406 824,400 690,700 138,300 829,000 Common stock Retained earnings Total stockholders equity Total 1iabilities and stockholders equity 1,311,600 1,254,000 Next Prey 8 of 9 Check my work 8 Rusco Company Income Statement For This Year Ended July 31 $1,040,80e 650,008 390,808 278,200 111,800 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: points $26,000 Gain on sale of investments (8,400) 17,600 129,400 38, 760 Loss on sale of equipment Income before taxes Income taxes Net income eBook $ 90,640 Print Reterences The following additional information is available for this year. a. The company declared and paid a cash dividend. b. Equipment was sold during the year for $53.600. The equipment originally cost $114,000 and had accumulated depreclation of $52.000. c. Long-term investments that cost $54,000 were sold during the year for $80,000. d. The company did not retire any bonds payable or repurchase any of its common stock Because the Cash account decreased so dramatically during this year, the company's executive committee is anxious to see how the income statement would appear on a cash basis. Required: 1. Using the direct method, adjust the company's income statement for this year to a cash basis. 2. Using the data from (1) above, and other data from the problem as needed, prepare a statement Mc 1 Prev 80f 9: Next > Required: 1. Using the direct method, adjust the company's income statement for this year to a cash basis. 2. Using the data from (1) above, and other data from the problem as needed, prepare a statement of cash flows for this year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the direct method, adjust the company's income statement for this year to a cash basis. (Adjustr to be deducted should be indicated with a minus sign.) es Rusco Company Direct Method of Determining the Net Cash flows from Operating activities Adjustments to a cash basis Adjustments to a cash basis 0 Selling and administrative expenses Check my work 8 Rusco Company Direct Method of Determining the Net Cash flows from Operating activities 1.11 oints Adjustments to a cash basis Skipped Adjustments to a cash basis eBook Print References Selling and administrative expenses Adjustments to a cash basis Income taxes Adjustments to a cash basis Mc Graw Prey. 8 of 9 E Next Show Check my wo 8 Operating activities Cash received from customers Less cash disbursements for points Skipped Total cash disbursements 0 eBook Investing activities Print Reterences Financing activities Beginning cash and cash equivalents