(Solved by Humans)-Zambrano Wholesale Corporation maintains its records on a cash basis. At the end of each year the...

Question

Zambrano Wholesale Corporation maintains its records on a cash basis. At the end of each year the company's accountant obtains the necessary information to prepare accrual basis financial statements. The following cash flows occurred during the year ended December 31, 2013:Cash receipts:From customers$675,000Interest on note4,000Loan from a local bank100,000Total cash receipts$779,000Cash disbursements:Purchase of merchandise$390,000Annual insurance payment6,000Payment of salaries210,000Dividends paid to shareholders10,000Annual rent payment24,000Total cash disbursements$640,000Selected balance sheet information: 12/31/1212/31/13Cash$25,000$164,000Accounts receivable62,00092,000Inventory80,00062,000Prepaid insurance2,500?Prepaid rent11,000?Interest receivable3,000?Note receivable50,00050,000Equipment100,000100,000Accumulated depreciation"equipment(40,000)(50,000)Accounts payable (for merchandise)110,000122,000Salaries payable20,00024,000Notes payable0100,000Interest payable0?Additional information:1.On March 31, 2012, Zambrano lent a customer $50,000. Interest at 8% is payable annually on each March 31. Principal is due in 2016.2.The annual insurance payment is made in advance on April 30. The policy period begins on May 1.3.On October 31, 2013, Zambrano borrowed $100,000 from a local bank. Principal and interest at 6% are due on October 31, 2014.4.Annual rent on the company's facilities is paid in advance on June 30. The rental period begins on July 1. Required:1.Prepare an accrual basis income statement for 2013 (ignore income taxes).