Question

Margaret Moore, M.D., maintains the accounting records of Moore Clinic on a cash basis. During 2020, Dr. Moore collected $132,258 from her patients and paid $50,809 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		$9,283		$17,324
Unearned service revenue		2,638		4,517
Accrued expenses		3,723		1,957
Prepaid expenses		1,905		3,397

Prepare a schedule that converts Dr. Moore’s "excess of cash collected over cash disbursed" for the year 2020 to net income on an accrual basis for the year 2020.

MARGARET MOORE, M.D. Conversion of Cash Basis to Accrual Basis For the Year 2020 $ > < < > $

Answer 1

Solution MARGARET MODRE MD Conversion of cash basię to Accrual basis for the year 2020 81449 8041 excess of each collected over cash desbursed | Add! Increase in accounts receivable Less: Increase in unearned service revenue Add, Decrease in accewed expenses Add: Increase in prepaid expenses Net Income in accoual basis (1879) 1266 1492 90869