$550,000 a) Converting income statement from cash to accrual basit, calculate net income Cash receipts Cash disbursements $425,000 January 1 balance December 31 balance Accounts Receivable $63,000 $58,000 Unearned Revenue $12,000 $14,000 Accrued liabilities $16,000 $13,000 Prepaid expenses $9,000 $15,000 1) Calculate revenue on the accrual basis 2) Calculate expenses on the accrual basis 3) Calculate net income on the accrual basis b) Converting income statement from accrual to cash basis Cash receipts $240,000 $205,000 Cash disbursements Accounts Receivable January 1 balance $23,000 Unearned Revenue $ 7,000 Accrued liabilities $6,000 Prepaid expenses $8,000 December 31 balance $26,000 $ 9,000 $ 7,000 1) Calculate revenue using the cash basis 2) Calculate expenses using the cash basis 3) Calculate net income using the cash basis $12,000