Why "Cash collected less the $5,000 decrease in Accounts recievable? Why 25,000 supplies purchase less 500 increase in supplies?

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 2018, the following cash flows were recorded $320,000 Cash collected from customers Cash paid for: Salaries Supplies Rent Insurance $180,000 25,000 12,000 6,000 20,000 243,000 77,000 Net operating cash flow You are able to determine the following information about accounts receivable, prepaid expenses, and accrued liabilities January 1, 2018 December 31, 2018 Accounts receivable Prepaid insurance Supplies Accrued liabilities $27,000 2,000 1,500 3.400 $32,000 1,000 2,400 (for miscellaneous expenses) In addition, you learn that the bank loan was dated September 30, 2018, with principal and interest at 6% due in one year. Depreciation on the company's equipment is $10,000 for the year Required Prepare an accrual basis income statement for 2018. (Ignore income taxes.)