Olga Industries keeps records under the cash basis of accounting rather than the accrual basis. Olga's 2012 income statement and additional data from 2011 and 2012 are as follows:

All accrued revenues and expenses as of 12/31/11 were collected and paid, respectively, in 2012. All deferred revenues and expenses as of 12/31/11 were earned and used, respectively, in 2012.
Required
Convert revenues and expenses from the cash basis to the accrual basis and recalculate income. Briefly explain why each adjustment is made.

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Olga Industries Cash-Basis Income Statement For the Year Ending December 31, 2012 Revenues Expenses Net income $54,000 35,000 $19,000 Additional Information: 12/31/11 6,000 13,000 5,000 10,000 12/31/12 Accrued Revenues Deferred Revenues Accrued Expenses Deferred Expenses 8,000 4,500 4,000 9,500