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, 2018: $640,000 3,440 90,000 $ 733, 440 Cash receipts: From customers Interest on note Loan from a local bank Total cash receipts Cash disbursements: Purchase of merchandise Annual insurance payment Payment of salaries and wages Dividends paid to shareholders Annual rent payment Total cash disbursements $383,000 5,160 203,000 12,000 20,500 $623,660 Selected balance sheet information: 12/31/18 $131,280 85,000 58,500 Cash Accounts receivable Inventory Prepaid insurance Prepaid rent Interest receivable Note receivable Equipment Accumulated depreciation equipment Accounts payable (for merchandise) Salaries and wages payable Notes payable Interest payable 12/31/17 $ 21,500 58,500 73,000 1,800 10,300 2,580 43,000 65,000 (36,500) 106,500 19,300 43,000 65,000 (43,000) 115,000 22,700 90,000 0 ? Additional information: 1. On March 31, 2017, Zambrano lent a customer $43,000. Interest at 8% is payable annually on each March 31. Principal is due in 2021. 2. The annual insurance payment is paid in advance on April 30. The policy period begins on May 1. 3. On October 31, 2018, Zambrano borrowed $90,000 from a local bank. Principal and interest at 6% are due on October 31, 2019. 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 2018 (ignore income taxes). (Other expenses should be indicated with a minus sign.) 2. Determine the following balance sheet amounts on December 31, 2018: Prepare an accrual basis income statement for 2018 (ignore income taxes). (Other expenses should be indicated with a minus sign.) ZAMBRANO WHOLESALE CORPORATION Income Statement For the Year Ended December 31, 2018 ( Required 1 Required 2 > Required 1 Required 2 Determine the following balance sheet amounts on December 31, 2018: a. Prepaid insurance b. Prepaid rent c. Interest receivable d. Interest payable