Stanley and Jones Lawn Service Company (S&J) maintains its books on a cash basis. However, the company recently borrowed $100,000 from a local bank, and the bank requires S&J to provide annual financial statements prepared on an accrual basis. During 2021, the following cash flows were recorded:

You are able to determine the following information about accounts receivable, prepaid expenses, and accrued liabilities:

In addition, you learn that the bank loan was dated September 30, 2021, with principal and interest at 6% due in one year. Depreciation on the company?s equipment is $10,000 for the year.

Required:Prepare an accrual basis income statement for 2021.

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Cash collected for: Services to customers Cash paid for: Salaries Supplies Rent Insurance Miscellaneous $320,000 $180,000 25,000 12,000 6,000 20,000 243,000 Net operating cash flow $ 77,000 January 1, 2021 December 31, 2021 Accounts receivable $32,000 $27,000 Prepaid insurance -0- 2,000 1,000 1,500 Supplies Accrued liabilities (for miscellaneous expenses) 2,400 3,400