Stanley and Jones Lawn Service Company (S&J) maintains its books on a cash basis. However, the company recently borrowed $230,000 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: $ 450,000 Cash collected for: Services to customers Cash paid for: Salaries Supplies Rent Insurance Miscellaneous Net operating cash flow $ 193,000 38,000 22,000 12,000 33,000 298,000 $152,000 You are able to determine the following information about accounts receivable, prepaid expenses, and accrued liabilities: Accounts receivable Prepaid insurance Supplies Accrued liabilities (for miscellaneous expenses) January 1, 2021 $34,000 0 2,300 December 31, 2021 $ 28,000 3,300 3,200 3,700 5,400 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 $12,000 for the year. Required: Prepare an accrual basis income statement for 2021. (Ignore income taxes.) Answer is complete but not entirely correct. STANLEY AND JONES LAWN SERVICE COMPANY Income Statement For the Year Ended December 31, 2021 Service revenue 152,000 X Operating expenses: Salaries expense $ 193,000 Supplies expense 32,500 X Rent expense 22.000 Insurance expense 8,700 Miscellaneous expense 31,300 X Depreciation expense 12,000 299,500 (147,500) Total operating expenses Operating income Other expense: Interest expense Net income 3,450 $ (150,950)