Required 1, 2
Mary Walker. president of Rusco Company. considers S47.0c0 to be the minimum cash balance for operating purpases. As can be seen from the following statements, only \$42,000 in cash wos avsilobie at the end of this year. Since the corrpary reported a large net income for the yeat, and also issued both bends and common stock, the sharp decline in cash is puezling to Ms. Walket. The following acicitienal ifformation is envilatie for this year. a. The company declared and paid a cash dididend b. Equipment was soid during the year for $65,500. The equipment originaly cost $144,000 and had accumulated depreciation of $67,000 c. Long-term invesiments that cost $94.000 were sold during the year for $177,500. d. The company did not retire any bonds payable or repurchase any of its common stodk. Because the Cash account decreased so dramatically during this yew, the company's executive committee is arsiaus to see how the income statemert would oppear on a cash bost. Pecuired: 1. Using the direct method, adjust the company's income statement for this year to a cash basis. 2. Using the data from (I) above, and ather data from the problem as needed, prepare a statement of casin flows for this year. Complete this question by entering your answers in the tabs below. Using the direct mathod, adjust the company's inceme statement for this war to a cash basis. (Adjustment amouns that are to be dectucted should be indicated with a minus 5gn. ) Mary Walker. president of Rusco Company. considers S47.0c0 to be the minimum cash balance for operating purpases. As can be seen from the following statements, only \$42,000 in cash wos avsilobie at the end of this year. Since the corrpary reported a large net income for the yeat, and also issued both bends and common stock, the sharp decline in cash is puezling to Ms. Walket. The following acicitienal ifformation is envilatie for this year. a. The company declared and paid a cash dididend b. Equipment was soid during the year for $65,500. The equipment originaly cost $144,000 and had accumulated depreciation of $67,000 c. Long-term invesiments that cost $94.000 were sold during the year for $177,500. d. The company did not retire any bonds payable or repurchase any of its common stodk. Because the Cash account decreased so dramatically during this yew, the company's executive committee is arsiaus to see how the income statemert would oppear on a cash bost. Pecuired: 1. Using the direct method, adjust the company's income statement for this year to a cash basis. 2. Using the data from (I) above, and ather data from the problem as needed, prepare a statement of casin flows for this year. Complete this question by entering your answers in the tabs below. Using the direct mathod, adjust the company's inceme statement for this war to a cash basis. (Adjustment amouns that are to be dectucted should be indicated with a minus 5gn. )
