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.
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2016
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2017
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2018
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Cash receipts from sales:
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|
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On 2016 sales
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$270,700
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$168,230
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$27,090
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|
On 2017 sales
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-0-
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355,340
|
90,130
|
|
On 2018 sales
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|
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429,650
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Cash payments for expenses:
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|
|
|
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On 2016 expenses
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200,900
|
62,590
|
24,730
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|
On 2017 expenses
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42,600 a
|
145,100
|
54,980
|
|
On 2018 expenses
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|
48,090 b
|
211,040
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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.