Jill Accardo, M.D., maintains the accounting records of Accardo Clinic on a cash basis. During 2025, Dr. Accardo collected $142,600 from her patients and paid $55,470 in expenses. At January 1, 2025, and December 31, 2025, 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. Accardo’s “excess of cash collected over cash disbursed” for the year 2025 to net income on an accrual basis for the year 2025.

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Accounts receivable Unearned service revenue Accrued expenses Prepaid expenses January 1, 2025 $9,250 2,840 3,435 1,917 December 31, 2025 $15,927 4,111 2,108 3,232