For the just completed year, Hanna Company had net income of $120,000 Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows: December 31 End of Beginning of Year Year Current assets: Cash and cash $ 59,900 $ 79,000 equivalents Accounts receivable $160,000 $ 196,000 Inventory $444,000 $ 349,000 Prepaid expenses $ 11,200 $ 15,000 Current liabilities: Accounts payable $358,000 $ 394,000 Accrued liabilities $ 7,600 $ 11,500 Income taxes payable $ 40,800 $ 33,000 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 $1,070,000 600,000 470,000 310,000 160,000 40,000 $ 120,000 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 Selling and administrative expenses Income before taxes Income taxes Net income 310,000 160,000 40,000 120,000 $ Required: Using the direct method, convert the company's Income statement to a cash basis. (Adjustment amou 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