Horned Frogs Fine Cooking maintains its books using cash-basis accounting. However, the company recently borrowed $50,000 from a local bank, and the bank requires the company to provide annual financial statements prepared using accrual basis accounting as part of the creditworthiness verification. During 2012, the company records the following cash flows:

You are able to determine the following information:
____________________________________January 1, 2012..................December 31, 2012
Accounts Receivable..................................$16,000...........................$12,000
Prepaid Insurance.........................................1,200..............................3,200
Supplies.......................................................-0-..............................1,500
Salaries Payable..........................................3,200..............................2,300
In addition, depreciation on the company's building is $6,000 for the year.
Required:
Prepare an accrual-basis income statement for 2012. (Ignore income taxes.)

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Cash collected from customers Cash paid for: $55,000 Salaries Supplies Repairs and maintenance Insurance Advertising $22,000 8,000 7,000 3,000 5,000 45,000 $10, Net cash flows