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Mary Walker, president of Rusco Company, considers $24,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $19,000 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 Busco Company Comparative Balance Sheet at July 31 This Year Current assets 19.000 204,800 253.500 487.200 102,000 868.000 212,000 $ 37.800 215,200 198,400 19.900 471,200 140,000 754.000 191,200 562,800 $1,174,000 $1,245,200 Accounts receivable Inventory Prepaid expenses Total current assets Long-term investments Plant and equipment Les accumulated depreciation Net plant and equipment Total assets Liabilities and stockholders' Equity Current liabilities Mccounts payable Accred liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Stockholders equity Common stock Retained earnings Total stockholders equity Total abilities and stockholderiquity $ $ 234,400 15,000 41.000 178,600 8.400 45,200 232.200 212,000 144.200 108,000 635,500 165,500 154.800 $1,245,200 $1,174,000 e company Income statement For This Year Ended July 31 Ruco Company Income Statement For This Year Ended July 31 Sales Cont of goods sold Gros margin Selling and administrative expenses Net operating income Nonoperating items! Gain on sale of investments $22,000 Loss on sale of equipment 16.800) Income before taxes Income taxes Net income $880,000 550.000 330.000 235,400 94,600 15,200 109,800 32,920 $ 76,880 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 $47,200. The equipment originally cost $98,000 and had accumulated depreciation of $44,000 c. Long-term Investments that cost $38.000 were sold during the year for $60,000 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 (1) above, and other data from the problem as needed, prepare a statement of cash flows for this year