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Jill Accardo, M.D., maintains the accounting records of Accardo Clinic on a cash basis. During 2020, Dr. Accardo collected $142,600 from her patients and paid $55,470 in expenses. At January 1, 2020, and December 31, 2020, she had accounts receivable, unearned service revenue, accrued expenses, and prepaid expenses as follows. (All long-lived assets are rented.) January 1, 2020 December 31, 2020 Accounts receivable $9,250 $15,927 Unearned service revenue 2,840 4,111 Accrued expenses 3,435 2,108 Prepaid expenses 1,917 3,232 Instructions Prepare a schedule that converts Dr. Accardo’s “excess of cash collected over cash disbursed” for the year 2020 to net income on an accrual basis for the year 2020.

Sagot :

Answer and Step-by-step explanation:

The preparation of the schedule is presented below:

Jill Accardo, MD

Conversion of Income Statement

from Cash Basis to Accrual Basis

For the Year 2020

Particulars        Cash                     Adjustments                     Accrual

                         Basis          Add          Deduct                      Basis

Revenue from

fees:                $142,600

 

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