S&J Lawn Service Company maintains its books on a cash basis. However, the company recently borrowed $$210,000$ from a local bank, and the bank requires S&J to provide annual financial statements prepared on an accrual basis. During $2024,$ the following cash flows were recorded: 

 

Cash collected for: Services to customers $ $430,000$

Cash paid for:

Salaries $ $191,000$

Supplies $36,000$

Rent $20,000$

Insurance $10,000$

Miscellaneous $31,000288,000$

Net operating cash flow $ $142,000$

You are able to determine the following information about accounts receivable, prepaid expenses, and accrued liabilities:

January $1,2024$ December $31,2024$

Accounts receivable $ $32,000$ $ $27,000$

Prepaid insurance $03,100$

Supplies $2,1003,100$

Accrued liabilities

$($for miscellaneous expenses$)3,5005,000$

In addition, you learn that the bank loan was dated September $30,2024,$ with principal and interest at $6\%$ due in one year. Depreciation on the companys equipment is $$10,000$ for the year.

Required:

Prepare an accrual basis income statement for $2024.($Ignore income taxes.$)$

Answer rating: 100% (QA)

To prepare an accrual basis income statement for SJ Lawn Service Company in 2024 we need to account ... View the full answer