For the just completed year, Hanna Company had net income of $137,000. Balances in the companys current asset and current liability accounts at the beginning and end of the year were as follows:

	December 31
	End of Year		Beginning of Year
Current assets:
Cash	$	64,000	$	77,000
Accounts receivable	$	162,000	$	194,000
Inventory	$	447,000	$	346,000
Prepaid expenses	$	12,100	$	14,200
Current liabilities:
Accounts payable	$	354,000	$	386,000
Accrued liabilities	$	7,500	$	12,200
Income taxes payable	$	38,400	$	31,000

The Accumulated Depreciation account had total credits of $58,000 during the year. Hanna Company did not record any gains or losses during the year.

The companys income statement for the year appears below:

Sales	$	1,080,000
Cost of goods sold		595,000
Gross margin		485,000
Selling and administrative expenses		312,000
Income before taxes		173,000
Income taxes		36,000
Net income	$	137,000

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.)