Corinne Dunbar, M.D., maintains the accounting records of Dunbar Clinic on a cash basis. During 2022, Dr. Dunbar collected €142,600 from her patients and paid €60,470 in expenses. At January 1, 2022, and December 31, 2022, she had accounts receivable, unearned service revenue, accrued expenses, and prepaid expenses as follows. All long-lived assets are rented.

Instructions

Prepare a schedule that converts Dr. Dunbar’s “excess of cash collected over cash disbursed” for the year 2022 to net income on an accrual basis for the year 2022.

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January 1, 2022 December 31, 2022 Accounts receivable €11,250 €15,927 Unearned service revenue 2,840 4,111 Accrued expenses 3,435 2,108 Prepaid expenses 1,917 3,232