Mary Walker, president of Rusco Company, considers $23.000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $18.000 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 Rusco Company Comparative Balance Sheet at July 31 This Year Last Year $ 18,888 283,680 252.ee 9. Lee 483 488 99.000 866.00 211.See 650, 500 $1236,9 36, 688 213,900 197,880 18,6ea 11456, 980 135 Due 253.800 1902 562100 $1,164, Bea Assets Current assets! Cash and cash equivalents 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 abilities Income taxes payable Total current liabilities bonds payable Total liabilities Stockholders' equity Common stock Retained earnings otal stockholders equity Total abilities and stockholders equity 233320 15,600 230, 282 Tabei 395,4 13 BU 1115 Rusco Company Income Statement For This Year Ended uy 31 a good Lot 511 stra Rusco Company Income Statement For This Year Ended July 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments LOSS on sale of equipment Income before taxes Income taxes Net income 5860,000 53758 322,568 230 e 92,45 $21, Soe 14.908 102,350 3210 The following additional information is available for this year. 8. The company declared and paid a cash div dend. b. Equipment was sold during the year for $46,400. The equipment originally cost $95.000 and had accumulated depreciation of $43.000 Long-term investments that cost $36.000 were sold during the year for $57.500 a. The company did not retire any bonds payable or repurchase any of its common stock Because the cash account decreased so aromatically during this year the con secutive committee is anxious to see how the ncome statement would apped on a case basis e Required: 1. Using the direct method, adjust the companys come statement fortryer to a sus basis Singine wata from ove on other on the problemas dedicare a statement of chos