E3-19 Cash and Accrual basis

Nalezny Corp. maintains its financial records on the cash basis of ac- E3-19 (Cash and Accrual Basis) counting. Interested in securing a long-term loan from its regular bank, Nalezny Corp. requests you as its independent CPA to convert its cash-basis income statement data to the accrual basis. You are pro- vided with the following summarized data covering 2009, 2010, and 2011. 2009 2010 2011 Cash receipts from sales: On 2009 sales On 2010 sales On 2011 sales $290,000 $160,000 $30,000 355,000 90,000 408,000 Cash payments for expenses: 185,000 On 2009 expenses On 2010 expenses On 2011 expenses 67,000 170,000 25,000 55,000 45,000 218,000 "Prepayments of 2010 expenses. Prepayments of 2011 expenses. instructions (a) Using the data above, prepare abbreviated income statements for the years 2009 and 2010 on the cash basis. b) Using the data above, prepare abbreviated income statements for the years 2009 and 2010 on the accrual basis