Wiley Company's income statement for Year 2 follows: Cont of goods sold Gronn bargin Selling and administrativo exponnen Incone before taxon Income taxe Net income 0 2,000 1.200 1,600 400 1,200 460 720 The company's selling and administrative expense for Year 2 includes $80 of depreciation expense. Selected balance sheet accounts for Wiley at the end of Years 1 and 2 are as follows: Yea Year 6215 0154 0250 S98 Current Assets Accounts receivable Inventory Prepaid expenses Current Liabilities counts payable Accrued abilities Thoone Laxos payable 0113 2 0120 Required: 1. Using the direct method, convert the company's income statement to a cash basis 2. Assume that during Year 2 Wiley had a $14,000 gain on sale of investments and a $6,000 loss on the sale of equipment. Would these transactions affect the computation in (1) above? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the direct method, convert the company's income statement to a cash basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) Wiley Company Direct Method of Determining the Net Cash flows from Operating activities Adjustments to a cash basis Adjustments to a cash basis: Selling and administrative expenses Adjustments to a cash basis income taxes Adjustments to a cash basit: Required a Required 2 > The company's selling and administrative expense for Year 2 includes $80 of depreciation expense. Selected balance sheet accounts for Wiley at the end of Years 1 and 2 are as follows: Yoar 2 Your I 0215 15 5:35 0250 0190 320 Current Assets Accounts receivable Inventory Prepaid expenses Current Liabilities Accounts payable Acarved liabilito Income tax payable 0110 11 5120 82 22 505 Required: 1. Using the direct method, convert the company's income statement to a cash basis. 2. Assume that during Year 2 Wiley had a $14,000 gain on sale of investments and a $6,000 loss on the sale of equipment. Would these transactions affect the computation in (1) above? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume that during Year 2 Wiley had a $14,000 gain on sale of investments and a $6,000 loss on the sale of equipment. Would these transactions affect the computation in (1) above. No, gains and losses on income statement are ignored under direct method ONo, gains and losses on income statement are considered under direct method. Yes, gains and losses on income statement are ignored under direct method. Yes, gains and losses on income statement are considered under direct method.