how can you prepare an income statement for 2021 and a balance sheet as of December 31, 2021.

Cash receipts:

Issue of common stock $80,000

Collections from customers 345,000

Borrowed from local bank on

April 1, note signed requiring

principal and interest at 12% to

be paid on March 31, 2022 39,000

Total cash receipts $464,000

Cash disbursements:

Purchase of merchandise $207,500

Payment of salaries 83,500

Purchase of office equipment 48,000

Payment of rent on building 11,750

Miscellaneous expense 13,700

Total cash disbursements $364,450