*E3-19 (L07) (Cash and Accrual Basis) Wayne Rogers Corp. maintains its financial records on the cash basis of accounting.
Interested in securing a long-term loan from its regular bank, Wayne Rogers Corp. requests you as its independent CPA to convert its cash-basis income statement data to the accrual basis. You are provided with the following summarized data covering 2016, 2017, and 2018.

Instructions

(a) Using the data above, prepare abbreviated income statements for the years 2016 and 2017 on the cash basis.

(b) Using the data above, prepare abbreviated income statements for the years 2016 and 2017 on the accrual basis.

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2016 2017 2018 On 2016 sales On 2017 sales Cash receipts from sales: On 2018 sales Cash payments for expenses: On 2016 expenses $295,000 $160,000 $ 30,000 -0- 355,000 90,000 408,000 185,000 67,000 25,000 On 2017 expenses 40,000* 160,000 55,000 On 2018 expenses 45,000 218,000 "Prepayments of 2017 expenses. Prepayments of 2018 expenses.