prepare income statement and balance sheet.

Appendix 3.1) Cash-Basis Accounting Puntarelli Contracting keeps its accounting records on a cash basis during the year. At year-end, it adjusts its books to the accrual basis for preparing its financial statements. At the end of 2018, Puntareli reported the following balance sheet items: prepare 2010 income Statement Debit Credit and bouance Cash $2,700 Accounts receivable 4,200 Inventory 5,600 Equipment 12,000 Accumulated depreciation $4,800 Accounts payable 6,100 T. Puntarelli, capital 13,600 Totals $24,500 $24,500 It is now the end of 2019. The company's checkbook shows a balance of $4,700, which includes cash receipts from customers of $51,300 and cash payments of $49,300. An examination of the cash payments shows that: (1) $30,600 was paid to suppliers, (2) $12,700 was paid for other operating costs (including $7,200 paid on January 1 for 2 years' annual rent), and (3) $6,000 was withdrawn by T. Puntarelli. On December 31, 2019, (1) customers owed Puntarelli Contracting $5,900, (2) Puntarelli owed suppliers and employees $7,000 and $900, respectively, and (3) the ending inventory was $6,300. Puntarelli is depreciating the equipment using straight-line depreciation over a 10-year life (no residual value)