Mary Walker, president of Rusco Company, considers $14,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $8,000 in cash was avallable at the end of this year. Because 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. The following additional information is avaliable for this year. a. The company paid a cash dividend. b. Equipment costing $20,000 with accumulated depreciation of $10,000 was sold for $8,000. c. Long-term investments costing $20,000 were sold for $30,000. 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 committee is 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 Requirement 1, 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. Using the direct method, adjust the company's income statement for this year to a cash basis. Note: Adjustment amounts that are to be deducted should be indicated with a minus sign. \begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ Rusco Company } \\ \hline Direct Method of Determining the Not Cash flows from Operating activities \\ \hline Sales & $500,000 & \\ \hline Adjustments to a cash basis: & & \\ \hline Depreciation & & \\ \hline & & \\ \hline & & \\ \hline Adjustments to a cash basis: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Selling and administrative expenses & & \\ \hline Adjustments to a cash basis: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Income taxes & & \\ \hline Adjustments to a cash basis: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} Mary Walker, president of Rusco Company, considers $14,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $8,000 in cash was avallable at the end of this year. Because 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. The following additional information is avaliable for this year. a. The company paid a cash dividend. b. Equipment costing $20,000 with accumulated depreciation of $10,000 was sold for $8,000. c. Long-term investments costing $20,000 were sold for $30,000. 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 committee is 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 Requirement 1, 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. Using the direct method, adjust the company's income statement for this year to a cash basis. Note: Adjustment amounts that are to be deducted should be indicated with a minus sign. \begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ Rusco Company } \\ \hline Direct Method of Determining the Not Cash flows from Operating activities \\ \hline Sales & $500,000 & \\ \hline Adjustments to a cash basis: & & \\ \hline Depreciation & & \\ \hline & & \\ \hline & & \\ \hline Adjustments to a cash basis: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Selling and administrative expenses & & \\ \hline Adjustments to a cash basis: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Income taxes & & \\ \hline Adjustments to a cash basis: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular}