Question

1. On October 1, 2018, YD collected $54,000 for consulting services it agreed to provide during the next 12 months 2. Adjusted the accounts to reflect the amount of consulting service revenue recognized in 2018 Required Based on this information alone: a. Record the events under an accounting equation b. Prepare an income statement, balance sheet, and statement of cash flows for the 2018 accounting period. c. Ignoring all other future events, what is the amount of service revenue that would be recognized in 2019? Complete this question by entering your answers in the tabs below. Reg A Req B1 IncReq B2 Bal Stmt Sheet Reg B3 CF Stmt Reg C Record the events under an accounting equation. (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.) YARD DESIGNS Accounting Equations for the Year 2018 < Prey 2 of 2 !!! Next

Answer 1

a.

Accounting equation Event Cash ||Unearned revenue + Retained earnings Event 54,000/= 54,000 + Adjusting - 13500 + 13500 54,000/= 40,500+ 13,500

b.

13500 Income statement Service revenue Less: Expenses Net income 13500

Balance sheet Assets: Cash 54000 Total assets 54000 Liabilities and equity Liabilities: Unearned revenue Total liabilities 40500 40500 Equity: Common stock Retained earnings Total equity 13500 135001 Total liabilities and equity 54000

Cash flow statement Cash flow from operating activities: Collection from customers Net cash flow from operating activities 54000 54000 Cash flow from investing activities Cash flow from financing activities Net increase in cash 54000

c.

Amount of service revenue would be recognized in 2019 = $54,000 x 9/12 = 40,500