Mary Walker, president of Rusco Company, considers $45,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $40,000 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 available for this year. a. The company paid a cash dividend. b. Equipment costing $140,000 with accumulated depreciation of $65,000 was sold for $64,000. c. Long-term investments costing $80,000 were sold for $112,500. 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: Required: 1. Using the ditect method, adjust the company's inconse statement for this year to a cash basis. 2. Using the dota 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 methsd, odjust the company income stotement for the vear to e cash tasis. Nste: Adjustinent amounts thyt are to be deducted thould be indkated with a minus sign. HWCh 15 i Strved 2 2.5 points ebook Print References \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Direct Method of Determining the Net Cash flows from Operating activitios } \\ \hline Sales & 1,300,000 & \\ \hline Adjustments to a cash basis: & & T \\ \hline \multirow[t]{2}{*}{ Decrease in accounts receivable } & 12,500 & + \\ \hline & & 1,312,500 \\ \hline \multicolumn{3}{|l|}{ Cost of goods sold } \\ \hline \multicolumn{3}{|l|}{ Adjustments to a cash basis: } \\ \hline \multirow[t]{2}{*}{ Decrease in accounts payable } & 934,000 & \\ \hline & & 934,000 \\ \hline \multicolumn{3}{|l|}{ Solling and administrative expenses } \\ \hline \multicolumn{3}{|l|}{ Adjustments to a cash basis: } \\ \hline & & \\ \hline \\ \hline \multirow{3}{*}{\multicolumn{3}{|c|}{ Income taxes }} \\ \hline & & \\ \hline & & \\ \hline \multicolumn{3}{|l|}{ Adjustments to a cash basis: } \\ \hline & & \\ \hline & & 0 \\ \hline= & & 378,500 \\ \hline \end{tabular}