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Stanley and Jones Lawn Service Company (S&J) 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 2018, the following cash flows were recorded:

Cash collected from customers				$	520,000
Cash paid for:
Salaries	$	200,000
Supplies		45,000
Rent		29,000
Insurance		12,000
Miscellaneous		40,000			326,000
Net operating cash flow				$	194,000

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

	January 1, 2018			December 31, 2018
Accounts receivable	$	41,000		$	31,500
Prepaid insurance		0			4,000
Supplies		3,000			3,550
Accrued liabilities (for miscellaneous expenses)		4,400			6,800

In addition, you learn that the bank loan was dated September 30, 2018, with principal and interest at 6% due in one year. Depreciation on the companys equipment is $19,000 for the year. Required: Prepare an accrual basis income statement for 2018. (Ignore income taxes.)

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