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:

Cash collected for services		$320,000
Cash paid for:
Salaries	$180,000
Supplies	25,000
Rent	12,000
Insurance	6,000
Miscellaneous	20,000	243,000
Net operating cash flow		$ 77,000

You are to determine the following information about accounts receivable, prepaid expenses and accrued liabilities:

	January 1, 2021	December 31, 2021
Accounts Receivable	$32,000	$27,000
Salaries Payable	-0-	-0-
Prepaid Insurance	-0-	2,000
Rent Payable	-0-	-0-
Supplies	1,000	1,500
Accrued Liabilities*	2,400	3,400

*(for miscellaneous expenses)

In addition, you learn that the bank loan was dated September 30, 2021, with principal at 6% due in one year. Depreciation on the companys equipment is $10,000 for the year.

Required:

1. Determine the Service Revenue, supplies expense, rent expense, insurance expense and miscellaneous expense using the accrual basis (Show all of your computations with the work paper provided).
2. Prepare an accrual basis income statement for 2021 using the work paper provided. (Show your income statement with the work paper provided)