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Check my w 2 Exercise 2-18 (Algo) Cash versus accrual accounting (LO2-9) Stanley and Jones Lawn Service Company (583) maintains its books on a cash
Check my w 2 Exercise 2-18 (Algo) Cash versus accrual accounting (LO2-9) Stanley and Jones Lawn Service Company (583) maintains its books on a cash basis. However, the company recently borrowed $300,000 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 llo $520,000 Cath collected for: Services to customers Cash paid for: Salaries Supplies Rent Insurance Miscellaneous Net operating cash flow 5200,000 45,000 29, eee 12,000 4e, ese 326,000 $194,000 You are able to determine the following information about accounts receivable prepaid expenses, and accrued liabilities: January 1, 2021 December 31, 2021 Accounts receivable $41,eee Prepaid insurance $31,500 4, oee Supplies 3,000 Accrued liabilities 3,550 (for miscellaneous expenses) 4,400 6,8ee STANLEY AND JONES LAWN SERVICE COMPANY Income Statement For the Year Ended December 31, 2021 Service revenue Operating expenses: Supplies expense Rent expense Insurance expense Miscellaneous expense Depreciation expense Salaries expense S 0 Total operating expenses Operating income Other expense: 0 Net income $ 0 Check my w $520, e Cash collected for: Services to customers Cash paid fort Salaries Supplies Rent Insurance Miscellaneous Net operating cash flow $280,000 45,000 29,000 12,000 40,000 326, eee $ 194,000 You are able to determine the following information about occounts receivable prepaid expenses, and accrued Nobilities January 1, 2021 December 31, 2021 Accounts receivable $41,000 331,500 Prepaid insurance 4,000 Supplies 3,000 3,550 Accrued liabilities (for miscellaneous expenses) 4.400 6,000 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 $19,000 for the year Required: Prepare an accrual basis income statement for 2021 ignore income taxes)
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