Letterman Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Letterman Corp. requests you as its independent CPA to convert its cash-basis income statement data to the accrual basis. You are provided with the following summarized data covering 2013, 2014, and 2015.

Instructions
(a) Using the data above, prepare abbreviated income statements for the years 2013 and 2014 on the cash basis.
(b) Using the data above, prepare abbreviated income statements for the years 2013 and 2014 on the accrualbasis.

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2013 2014 2015 Cash receipts from sales: On 2013 sales On 2014 sales On 2015 sales $600,000 $201,000 701,000 $75,000 161,000 602,000 Cash payments for expenses: On 2013 expenses On 2014 expenses On 2015 expenses 360,000 10,000a 42,000 406,000 25,000 71,000 21.000b 451,000 Prepayments of 2014 expenses. Prepayments of 2015 expenses