Manning MD maintains his records on the cash basis. During 2018 Manning collected $220,000 from his patients and paid $100,000 in expenses. At Decemeber 31, 2017, and Decemeber 31, 2018 he had the following account balances:

Balances at 12/31

2017 2018

Accounts receivable $10,000 $15,000

Prepaid expenses 25,000 15,000

Accrued expenses 6,000 5,000

Uneraned revenue 7,000 10,000

Compute on accrual basis: (You MUST Show your work to get credit)

1. Service revenue

2. Operating expenses