Sorry its a long 2 part problem :/ Thank you for your help!

00 Mary Walker, president of Rusco Company, considers $35,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $30,000 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. 11.11 points Last Year eBook $ Print DO Rusco Company Comparative Balance sheet at July 31 This Year Assets Current assets: Cash $ 30,000 Accounts receivable 218,000 Inventory 263,500 Prepaid expenses 17,500 Total current assets 529,000 Long-term investments 135,000 Plant and equipment 890,000 Less accumulated depreciation 217,500 Net plant and equipment 672,500 Total assets $1,336,500 Liabilities and stockholders' Equity Current liabilities: Accounts payable $ 188,500 Accrued liabilities 9,500 Income taxes payable 54,000 Total current liabilities 252,000 Bonds payable 245,000 Total liabilities 497,000 Stockholders' equity: Common stock 703,600 Retained earnings 135,900 Total stockholders' equity 839,500 Total liabilities and stockholders' $1,336,500 equity 51,000 229,500 205,000 33,000 518,500 195,000 765,000 194,500 570,500 $1,284,000 References $ 246,500 18,000 46,500 311,000 130,000 441,000 675,000 168,000 843,000 $1,284,000 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 $27,500 Loss on sale of equipment (9,000) Income before taxes Income taxes Net income $1,100,000 687,500 412,500 294,250 118,250 18,500 136,750 40,950 95,800 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 $56,000. The equipment originally cost $120,000 and had accumulated depreciation of $55,000. c. Long-term investments that cost $60,000 were sold during the year for $87,500. 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: 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. Required 1 Required 2 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.) Rusco Company Direct Method of Determining the Net Cash flows from Operating activities Net income Adjustments to a cash basis: Depreciation 0 Adjustments to a cash basis: Selling and administrative expenses Adjustments to a cash basis: 0 Income taxes Adjustments to a cash basis: Increase in income taxes payable $ Required 1 Required 2 > Required 1 Required 2 Using the data from (1) above, and other data from the problem as needed, prepare a statement of cash flows for this year. (Cash outflows and amounts to be deducted should be indicated with a minus sign.) k Rusco Company Statement of Cash Flows For the Year Ended July 31, 2014 Operating activities: Cash received from customers Less cash disbursements for. Additions to plant and equipment ces Total cash disbursements 0 0 Investing activities: 0 Financing activities: 0 0 Beginning cash and cash equivalents Ending cash and cash equivalents $ 0