For the just completed year, Hanna Company had net income of $146,000. 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 equivalents $4 65,000 $ 160,000 $438,000 $4 78,000 $ 192,000 $ 367,000 $4 Accounts receivable Inventory Prepaid expenses 11,300 14,500 Current liabilities: Accounts payable Accrued liabilities Income taxes payable $364,000 $. 8,400 $4 35,800 $400,000 $4 12,700 $4 28,000 The Accumulated Depreciation account had total credits of $46,000 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: $1,080,000 585,000 Sales Cost of goods sold Gross margin Selling and administrative expenses 495,000 306,000 Income before taxes 189,000 Income taxes 43,000 Net income $ 146,000 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 sian.)

For the just completed year, Hanna Company had net income of $146,000 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 Year of Year Current assets: Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Current liabilities: Accounts payable Accrued liabilities Income taxes payable $ 65,000 $ 78,000 $ 160,000 $ 192,000 $ 438,000 $367.000 $ 11,300 $ 14,500 $364,000 $400,000 $ 8,400 $ 12,700 $ 35,800 $ 28,000 The Accumulated Depreciation account had total credits of $46,000 during the year. Harina 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 $1,080,000 585,000 495,000 300,000 109,000 43,000 $ 146,000 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 Net Income Adjustments to a cash basis Depreciation Decrease in accounts receivable $ 0 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 $1,000,000 585,000 495,000 306,000 189,000 43,000 $ 146,000 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 Net Income Adjustments to a cash basis Depreciation Decrease in accounts receivable 0 Adjustments to a cash basis 0 Selling and administrative expenses Adjustments to a cash basis: Decrease in accrued liabilities Decrease in accounts payable 0 Income taxes Adjustments to a cash basis Increase in income taxes payable 0 0