Canviar Corp. maintains its financial records using the cash basis of accounting. Because it would like to secure a long-term loan from its bank, the company asks you, as an independent CPA, to convert its cash basis income statement information to the accrual basis. You are provided with the following summarized data for 2018, 2019, and 2020:

Instructions

Using the information above, prepare abbreviated income statements for the years 2018 and 2019, using:

a. the cash basis of accounting and

b. the accrual basis of accounting.

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2018 2019 2020 Cash receipts from sales: On 2018 sales On 2019 sales On 2020 sales Cash payments for expenses: On 2018 expenses On 2019 expenses On 2020 expenses $ 30,000 $320,000 $160,000 -0- 355,000 90,000 -0- -0- 408,000 185,000 67,000 25,000 40,000 135,000 45,000 55,000 218,000 -0- Prepayments of 2019 expenses вPrepayments of 2020 ехpenses