Grier & Associates maintains its records on the cash basis. You have been engaged to convert its cash basis income statement to the accrual basis. The cash basis income statement, along with additional information, follows: Grier & Associates Income Statement (Cash Basis) For the Year Ended December 31, 2025 Cash receipts from customers $425,000 Cash payments: Salaries and wages $170,000 Income taxes 65,000 Insurance 40,000 Interest 25,000 300,000 Net income $125,000 Additional information: Balances at 12/31 2025 2024 Accounts receivable $50,000 $30,000 Salaries and wages payable 10,000 20,000 Income taxes payable 24,000 19,000 Prepaid insurance 8,000 4,000 Accumulated depreciation 95,000 80,000 Interest payable 3,000 9,000
Grier & Associates maintains its records on the cash basis. You have been engaged to convert its cash basis income statement to the accrual basis. The cash basis income statement, along with additional information, follows:
Grier & Associates
Income Statement (Cash Basis)
For the Year Ended December 31, 2025
Cash receipts from customers $425,000
Cash payments:
Salaries and wages $170,000
Income taxes 65,000
Insurance 40,000
Interest 25,000 300,000
Net income $125,000
Additional information:
Balances at 12/31
2025 2024
Salaries and wages payable 10,000 20,000
Income taxes payable 24,000 19,000
Prepaid insurance 8,000 4,000
Accumulated
Interest payable 3,000 9,000
No plant assets were sold during 2025.
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