40. A company records items on the cash basis throughout the year and converts to an accrual basis for year-end reporting.

Its cash-basis net income for the year is $70,000.

The company has gathered the following comparative balance sheet information:

Beginning of year End of year Accounts payable $3,000 $1,000 Unearned revenue 300 500 Wages payable 300 400 Prepaid rent 1,200 1,500 Accounts receivable 1,400 600 What amount should the company report as its accrual-based net income for the current year?

a. $68,800

b. $70,200

c. $71,200

d. $73,200