Mary Walker, president of Rusco Company, considers $12,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $37.000 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 This Year Last Year C C Comparative Balance Sheet at July 11 Assets Current assetst Cash Accounts receivable Inventory Prepaid expenses Total current assets Long-term investments Plant and equipment Less accumulated depreciation Net plant and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Stockholders' equity: Common stock Retained earnings 37,000 226,400 269,800 22,400 555,600 156,000 984,000 221,000 683,000 $1,394,600 $ 59,40 238,600 209,200 41,400 548,660 230,000 772,600 196,600 575,400 $1,354,000 IT $ 194,800 10,200 59,600 264,600 266,000 530, 600 $ 254,200 19,400 50,000 323,603 124,000 447,600 744,400 119,600 710.ee 196,400 Help Save & EX Stockholders' equity: Con stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 744,400 119.60 14,000 $1,394,6 210.00 196.400 946 $1,354,000 Nunca Company Income Statement For This Year Ended: July 31 Sales Cast of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments $ 31,800 Loss on sale of equipment (10,400) Income before taxes Income taxes Net income $1,240,000 775.000 465,000 331,700 133,300 20,660 153,900 46,060 $ 107,840 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 $61600. The equipment originally cost $134,000 and had accumulated depreciation of $62,000. c. Long-term investments that cost $74.000 were sold during the year for $105,000. d. The company did not retire any bonds pavable or repurchase any of its common stock: a. The company declared and paid a cash dividend b. Equipment was sold during the year for $61600. The equipment originally cost $134,000 and had accumututed depreciation of $62,000 c. Long-term investments that cost $74,000 were sold during the year for $105,000 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 committees 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 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. (Adjustment amounts that are to be deducted should be indicated with a minus sign. Rusco Company