Butler Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Butler Corp. requests you to convert its cash-basis income statement data to the accrual basis. You are provided with the following summarized data covering 2021, 2022, and 2023.

Instructions

a. Using the data above, prepare abbreviated income statements for the years 2021 and 2022 on the cash basis.

b. Using the data above, prepare abbreviated income statements for the years 2021 and 2022 on the accrual basis.

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2021 2022 2023 Cash receipts from sales: On 2021 sales On 2022 sales On 2023 sales $290,000 $160,000 $ 30,0o00 -0- 355,000 90,000 408,000 Cash payments for expenses: On 2021 expenses 185,000 67,000 25,000 On 2022 expenses 40,000a 170,000 55,000 On 2023 expenses 45,000 218,0o0 aPrepayments of 2022 expenses. ÞPrepayments of 2023 expenses.