Need help in answer the below questions A & B (very bottom). Thanks!

Abme Kroywen, a New York based accountant, decided to sell her practice and retire. She has had discussions with an accountant from Israel who wants to relocate. The discussions are at the complex stage of agreeing on a price. Among the important factors have been the financial statements of Kroywen. Under the direction of Kroywen, her bookkeeper, Rima Viz, prepared the following Statement of Profits on a Cash basis from the incomplete records maintained (Viz never heard the term Balance Sheet before):

Abme Kroywen

- Statement of Profits - 2020 ($ in thousands)

Professional fees collected $ 315

Expenses paid:

Rent of office space $ 28

Utilities 5

Telephone 10

Office salaries 62

Office supplies 6

Miscellaneous 11

Total Expenses Paid: 122

Profit for the year $ 193

Hidden in the Herzliya, additional data was discovered:

a. Of the professional fees collected in 2020, $69 was for services performed prior to 2020.

b. At the end of 2020, professional fees of $45 for services performed during the year were yet uncollected.

c. Office equipment owned and used by Kroywen cost $50 and had an estimated useful life of 10 years (use straight-line).

d. An inventory of office supplies on December 31, 2020, reflected $3 worth of items

purchased during the year that were still on hand. Also, the records for 2019 indicate that

the supplies on hand at the end of the year were about $2.

e. At the end of 2020, a secretary whose annual salary is $36 had not been paid for December.

f. The phone bill for December 2020, amounting to $1, was not paid until January 2021 (the

phone bill for December 2019, $3, was paid on December 30, 2019).

g. The office rent paid of $28 was for 14 months (it includes rent for December 2019 and for January 2021).

Required:

a. using above information, can you show an Accrual based Income Statement for 2020.

Show computations please.

b. Viz defended his accounting policy by noting that Kroywen had founded the business and never had an intention of selling it. "Since over the life of the business accounting does not matter - Kroywen should use the simplest possible system - cash-based accounting." Do you agree? Briefly comment (no more than 5 lines).