Problem: Part Level Submission
Sunland Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Sunland Corp. requests you as its independent CPA to convert its cash-basis income statement data to the accrual basis. You are provided with the following summarized data covering 2016, 2017, and 2018.
|
2016
|
2017
|
2018
|
Cash receipts from sales:
|
|
|
|
On 2016 sales
|
$270,700
|
$168,230
|
$27,090
|
On 2017 sales
|
-0-
|
355,340
|
90,130
|
On 2018 sales
|
|
|
429,650
|
Cash payments for expenses:
|
|
|
|
On 2016 expenses
|
200,900
|
62,590
|
24,730
|
On 2017 expenses
|
42,600 a
|
145,100
|
54,980
|
On 2018 expenses
|
|
48,090 b
|
211,040
|
a. Prepayments of 2017 expenses.
b. Prepayments of 2018 expenses.
Using the data above, prepare abbreviated income statements for the years 2016 and 2017 on the accrual basis.