Wiley Company's Income statement for Year 2 follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Income before taxes Income taxes Net income $ 2,650 1.400 1,250 400 850 340 $ 518 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: Year 2 Year 1 $190 $166 $ 40 $235 $190 $ 29 Current Assets Accounts receivable Inventory Prepaid expenses Current Liabilities Accounts payable Accrued liabilities Income taxes payable $117 $ 5 $112 $ 81 $ 2e $ 85 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 $12,000 gain on sale of Investments and a $5,000 loss on the sale of equipment. Would these transactions affect the computation in () 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: 0 Adjustments to a cash basis: 0 Selling and administrative expenses Adjustments to a cash basis: 0 Income taxes Adjustments to a cash basis: 0 0