Prepare abbreviated income statements

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Reference no: EM131809100

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.

Reference no: EM131809100

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