Margarete received a \(\$ 60,000\) cash advance payment on June 1, 2011, for consulting services to be performed in the future. Services were to be provided for a one-year term beginning June 1, 2011.
Required

a. Record the June 1 cash receipt in T-accounts.

b. Record in T-accounts the adjustment required as of December 31, 2011.

c. Record the preceding transaction and related adjustment in a horizontal statements model like the following one:

d. Determine the amount of net income on the 2011 income statement. What is the amount of net cash flow from operating activities for 2011 ?

e. What amount of liabilities would Margarete report on the 2011 balance sheet?

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Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow