Minutemen Law Services maintains its books using cash-basis accounting. However, the company decides to borrow $100,000 from a local bank, and the bank requires Minutemen to provide annual financial statements prepared using accrual-basis accounting as part of the creditworthiness verification. During 2021, the company records the following cash flows:

You are able to determine the following information:

Required:Prepare an accrual-basis income statement for the year ended December 31, 2021, by calculating accrual-basis revenues and expenses.

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$70,000 Cash collected from customers Cash pald for: $36,000 Salarles Supples 4,000 Rent 5,000 Insurance 7,000 Utilitles 3,000 55,000 Net cash flows $15,000 January 1, 2021 December 31, 2021 Accounts Recelvable $21,000 $24,000 Prepald Insurance Supplles Salarles Payable -0- 5,000 2,700 3,700 2,000 4,400