Reed & Company keeps their accounting records on the cash basis, but converts to the accrual basis to prepare annual financial statements. During the year, Reeds clients paid them $260,000 and Reed paid $85,000 to cover operating expenses. Reeds account balances as of January 1 are given below, as are the correct (accrual) December 31 balances.

	January 1, 2017	December 31, 2017
Accounts Receivable	$14,000	$42,000
Prepaid Expenses	$28,000	$31,000
Accumulated Depreciation	$48,000	$64,000
Accrued Liabilities	$54,000	$46,000
Unearned Service Revenue	$70,000	$65,000

Compute (a) service revenue and (b) operating expenses on the accrual basis. Please show work showing how the t-accounts flow!