80.2K

Verified Solution

Link Copied!

S\&J Lawn Service Company maintains its books on a cash basis. However, the company recently borrowed $300,000 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: You are able to determine the following information about accounts receivable, prepaid expenses, and accrued liabilities: 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 company's equipment is $19,000 for the year. Required: Prepare an accrual basis income statement for 2024. (Ignore income taxes.) \begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ S\&J LAWN SERVICE COMPANY } \\ \hline \multicolumn{2}{|c|}{ Income Statement } \\ \hline Sales revenue & & \$ \\ \hline Operating expenses: & & \\ \hline Salaries expense & & \\ \hline Supplies expense & & \\ \hline Miscellaneous expense & & \\ \hline Depreciation expense & & \\ \hline Rent expense & & \\ \hline Insurance expense & & \\ \hline & & \\ \hline & & \\ \hline \multicolumn{1}{|c|}{ Total operating expenses } & & \\ \hline Operating income & & \\ \hline Other expense: & & \\ \hline Interest expense & & \\ \hline Net income & & \\ \hline \hline \end{tabular}

Answer & Explanation Solved by verified expert

See Answer