Morris Company uses cash-basis accounting for its records. During 2020, Morris collected $150,000 from its customers, made payments of $70,000 to its suppliers for merchandise inventory, and paid $40,000 for operating costs. Morris wants to prepare its financial statements on an accrual basis. In gathering information for the accrual-basis financial statements. Morris discovered the following.

At the beginning of 2020, customers owed Morris $20,000, and Morris owed suppliers

$7.000.

At the end of 2020, customers owed Morris $30,000, and Morris owed suppliers $11,000.

Two years ago, Morris purchased equipment for $10,000. The equipment has a useful life of five vears and no salvage value.

For the year 2020, Morris's beginning inventory was $5,000, and its ending inventory was $6.500.

At the beginning of 2020, Morris had prepaid rent of $3,000. At the end of the year, Morris had prepaid rent of $500.

Required:

Using accrual accounting, prepare an income statement for 2019 for Morris Company.

Using accrual accounting, prepare an income statement for 2020 for Morris Company.