Below is an example of conversion of a cash basis trial balance to accrual basis: (see next page)

JohnJane Company Cash Basis Accrual Basis Cash A/R, net Prepaid insurance Fixed assets Accumulated depreciation Accounts payable Accrued salaries Notes payable Interest payable Retained earnings Common stock Revenue Cost of goods sold Rent expense Salaries expense Insurance expense Office supplies expense Interest expense Other operating expenses 4,567 123,000 3,000 120,000 (32,009) (27,500) (4,000) (100,000) (900) (2,842) (2,000) (208,000) 66,500 18,000 31,684 5,600 1,800 900 2,200 4,567 123,000 a 3,000 b 120,000 (32,009) (27,500)c (4,000) d (100,000]) (900) e (2,842) (2,000) (85,000) (123,000) a 27,500c 39,000 18,000 27,684 8,600 1,800 4,000 d (3,000) b 900 e 2,200 a. To record accounts receivable and related revenue. b. To record unused portion of insurance at year end. c. To record inventory purchased on account, all of which is sold at year end. d. To record salaries earned by employees during last week of year, to be paid 1st week of new year. e. To record interest payable due as of last day of year on notes payable