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97 Review of the Accounting Process CHAPTER 2 18 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: versus ual unting $320,000 Cash collected for: Services to customers Cash paid for: 2-9 $180,000 25,000 Salaries Supplies Rent 12,000 6,000 20,000 Insurance 243,000 Miscellaneous 77,000 Net operating cash flow You are able to determine the following information about accounts receivable, prepaid expenses, and accrued liabilities: January 1, 2021 December 31, 2021 $32,000 $27,000 Accounts receivable 2,000 1,500 3,400 Prepaid insurance Supplies Accrued liabilities 1,000 2,400 (for miscellaneous expenses) 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 S10.000 for the year Required: Prepare an accrual basis income statement for 2021. (Ignore income taxes.)