Please review the problem and answer listed below and discuss the cash basis of accounting:

Revenue on the income statement was $125,800. Accounts receivable were $3,500 on January 1 and $3,540 on December 31. Unearned revenue was $1,050 on January 1 and $1,670 on December 31.

Show the computation of revenue for the year on a cash basis.

Answer: $125,800 + $3,500 - $3,540 - $1,050 + $1,670 = $126,380.