A company prepares its financial statements using the cash basis of accounting. During Year 1, it collected $450,000 from customers. The following balances were reported:<br/><br/>- Accounts Receivable: Jan 1: $20,000 | Dec 31: $35,000<br/>- Unearned Revenue: Jan 1: $5,000 | Dec 31: $2,000<br/><br/>What amount of Revenue should be reported on the accrual basis income statement?

Formula: Cash Collected + Change in AR + Change in Unearned Rev (inverse).<br/><br/>1. **Cash Collected:** $450,000<br/>2. **AR Adjustment:**<br/> Ending $35,000 - Beginning $20,000 = +$15,000 Increase.<br/> Increase means Sales > Collections. Add $15,000.<br/>3. **Unearned Revenue Adjustment:**<br/> Ending $2,000 - Beginning $5,000 = -$3,000 Decrease.<br/> Decrease means we earned revenue that was previously collected. Add $3,000.<br/><br/>Total Accrual Revenue = $450,000 + $15,000 + $3,000 = $468,000.