Mary Walker, president of Rusco Company, considers $$49,000$ to be the minimum cash balance for operating purposes. As can be

seen from the following statements, only $$44,000$ 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.

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 $$67,200.$ The equipment originally cost $$148,000$ and had accumulated depreciation of

$$69,000.$

c$.$ Long$-$term investments that cost $$88,000$ were sold during the year for $$122,500.$

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:

Using the direct method, adjust the company's income statement for this year to a cash basis.

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.

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.$)$