Company A collected layaway payments from customers and reported revenue as the customers made each payment (as cash was received). Company B recorded no revenue until the full purchase price had been paid and the customer took possession of the merchandise. Assume both companies had $50,000 owed by customers for layaways, which was payable in equal monthly payments over a 8 month period from September of Year 1 through April of Year 2 at a total of $6,250 per month.

Determine the amount that will be reported for each of the financial statement items listed below under the two layaway revenue recognition policies for Year 1 and Year 2:

a) Revenue

b) Cash flow from operations

c) Total liabilities