Question: Stanley and Jones Lawn Service Company S J maintains its books

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 2011, the following cash flows were recorded:

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

In addition, you learn that the bank loan was dated September 30, 2011, with principal and interest at 6% due in one year. Depreciation on the company's equipment is $10,000 for the year.

Prepare an accrual basis income statement for 2011. (Ignore incometaxes)

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  • CreatedJune 24, 2013
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