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For the just completed year, Hanna Company had net income of $139,000. Balances in the company's current asset and current lability accounts at the beginning
For the just completed year, Hanna Company had net income of $139,000. Balances in the company's current asset and current lability accounts at the beginning and end of the year were as follows: Current assets Cash and cash equivalents Accounts receivable Tnventory Prepaid expenses Current liabilities: Accounts payable Accrued liabilities Income taxes payable December 31 End of Beginning Year of Year $ 65,000 $ 78,000 $ 162,000 $200,000 $ 441,000 $349.000 $ 12,000 $ 13,500 $ 356,000 $400,000 $ 7,800 $ 11,400 $ 38,688 $ 31,000 The Accumulated Depreciation account had total credits of $60,000 during the year. Hanna Company did not record any gains or losses during the year. The company's income statement for the year appears below: Sales Cost of goods sold Gross margin Selling and administrative expenses Income before taxes Income taxes Net income $1,060,000 580,000 480,000 386,000 174.000 35,000 $ 139,000 Required: Using the direct method, convert the company's income statement to a cash basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) Hanna Company Direct Method of Determining the Net Cash Flows from Operating Activities Adjustments to a cash basis: Adjustments to a cash basis: Selling and administrative expenses Adjustments to a cash basis: Income taxes Adjustments to a cash basis
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