Question

Carla, M.D., maintains the accounting records of Carla Clinic on a cash basis. During 2017, Dr. Carla collected $152,164 from her patients and paid $49,931 in expenses. At January 1, 2017, and December 31, 2017, she had accounts receivable, unearned service revenue, accrued expenses, and prepaid expenses as follows. (All long-lived assets are rented.)

January 1, 2017

December 31, 2017

Prepare a schedule that converts Dr. Carla’s “excess of cash collected over cash disbursed” for the year 2017 to net income on an accrual basis for the year 2017.

CARLA, M.D.

Conversion of Cash Basis to Accrual Basis

For the Year 2017

 

 

January 1, 2017

 

December 31, 2017

Accounts receivable

 

$9,374

 

$16,255

Unearned service revenue

 

2,872

 

4,258

Accrued expenses

 

3,124

 

1,983

Prepaid expenses

 

1,725

 

3,475

 

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