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:

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, 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.)

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320,000 Cash collected from customers Cash paid for: Salaries Supplies Rent Insurance Miscellaneous $180,000 25,000 12,000 6,000 20,000 243,000 $ 77,000 Net operating cash flow 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)