ABC Company had cash collections of $50,000, made cash payments of $20,000, and reported cash basis net income of $30,000 for Year 6. The company has determined the following balance sheet amounts for the beginning and ending of Year 6. Balance Sheet Account 31 December, Year 61 January Year 6 Change Accounts Receivable $15,000 $10,000 $5,000 Prepaid Insurance 4,000 2.000 2,000 Unearned Service Revenue 5,000 20,000 (15,000) Salaries Payable 7,000 3.000 4,000 ABC Company also purchased a piece of equipment on 1/1/Year 6 for $5,000 in cash. The equipment has no salvage value and will be depreciated on a straight-line basis over five years Required: Compute ABC Company Year 6 accrual basis revenue expenses and net income Solution: Accrual Basis Revenues: Accrual Basis Expenses Accrual Basis Net Income