Exercise 2-18 (Algo) Cash versus accrual accounting (LO2-9) Stanley and Jones Lawn Service Company (S&J) maintains...

Income statement : Service revenue (380,000 + 30,000 -38,000) $372,000 Operating expense :- Salaries expenses $ 186,000 Supplies (31,000 +1,600 -1,800) $30, 800 Rent expenses $15,000 Insurance (12,000 +0-2600) $9,400 Misc. expense (26,000+4,000- 3,000) $ 27,000 Depriciation $ 16,000 Total Expenses $ 284,200 operating income $ 87, 800 ($372000 E-$284200 other expense : Interest ($ 160,000 X6% X 3/12) $2,400 Net income $ 85,400 ($87,800- $2,400)

$ 380,000 cash collected less $6,000 decrease in accounts recevable cash Accounts receivable (decrease in account) Sales revenue (to balance) $ 380,000 $8,000 $372,000 $200 Increase in supplies (2) $31,000 Cash paid for purchase of supplies less Supplies expense (to balance) $30,800 $ 200 $ 31,000 Supplies (increase in account Cash (3) $12,000 cash paid for insurance less $2,600 ending balance in prepaid msurance Insurance expense (to balance) Prepaid insurance (increase in account) $ 9,400 $2,600 $12,000 Cash 1 $ 26,000 cash paid for miscellaneous expenses plus increase in accured liabikties Miscellaneous expense (to balance) $27,000 | Accurred liabilities (increase in account | $1,000 Cash $26,000 $ 160,000 X 67 X 3/12 = $2,400 Interest expense $2,400 Interest payable $2,400