P 2-12 Cash versus accrual accounting LO2-9 Zambrano Wholesale Corporation maintains its records on a cash basis. At the end of each year the company's accountant obtains the necessary information to prepare accrual basis financial statements. The following cash flows occurred during the year ended December 31, 2024: Cash receipts: From customers Selected balance sheet information: Cash Accounts receivable Inventory Prepaid insurance Prepaid rent Interest receivable Notes receivable Equipment Accumulated depreciation Accounts payable (for inventory) $675,000 Interest on note 4,000 Loan from a local bank 100,000 Total cash receipts $779,000 Cash disbursements: Purchase of inventory $390,000 Annual insurance payment 6,000 Payment of salaries 210,000 Dividends paid to shareholders 10,000 Annual rent payment 24,000 Total cash disbursements $640,000 Page 105 12/31/2023 S 25,000 62,000 12/31/2024 $ 164,000 92,000 62,000 80,000 2,500 2 11,000 ? 3,000 ? 50,000 50,000 100,000 100,000 (40,000) (50,000) 110,000 122,000 20,000 24,000 0 100,000 0 ? Salaries payable Notes payable Interest payable Additional information: 1. On March 31, 2023, Zambrano lent a customer $50,000. Interest at 8% is payable annually on each March 31. Principal is due in 2027. 2. The annual insurance payment is paid in advance on April 30. The policy period begins on May 1. 3. On October 31, 2024, Zambrano borrowed $100,000 from a local bank and signed a note promising repayment. Principal and interest at 6% are due on October 31, 2025. 4. Annual rent on the company's facilities is paid in advance on June 30. The rental period begins on July 1. Required: 1. Prepare an accrual basis income statement for 2024 (ignore income taxes). 2. Determine the following balance sheet amounts on December 31, 2024: a. Prepaid insurance b. Prepaid rent c. Interest receivable d. Interest payable