Exercise 2-17A Unearned items on financial statements LO 2-7 Yard Designs (YD) experienced the following events in Year 1, its first year of operation: 1. On October 1, Year 1, YD collected $54,000 for consulting services it agreed to provide during the coming year. 2. Adjusted the accounts to reflect the amount of consulting service revenue recognized in Year 1. 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 Year 1 accounting period. c. Ignoring all other future events, what is the amount of service revenue that would be recognized in Year 2? Complete this question by entering your answers in the tabs below. Req A Req B Inc Req B Bal Stmt Sheet Req B Stmt of Cash Flows Req 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 1 Stockholders' Assets Liabilities Equity Event Unearned Retained Cash + Revenue Earnings Event Adj. + II + 0 = 0+ 0 < Req A Req B Inc Stmt > Req B Inc Req A Req B Bal Stmt Sheet Req B Stmt of Cash Flows Req C Prepare an income statement for the Year 1 accounting period. (Do not round intermediate calculations.) YARD DESIGNS Income Statement For the Year Ended December 31, Year 1 $ 0 < Req A Req B Bal Sheet > Req A Req B Inc Stmt Req B Bal Sheet Req B Stmt of Cash Flows Req C Prepare an balance sheet for the Year 1 accounting period. (Do not round intermediate calculations.) YARD DESIGNS Balance Sheet As of December 31, Year 1 Assets Total assets Liabilities Total liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity $ 0 $ 0 0 $ 0 < Req B Inc Stmt Req B Stmt of Cash Flows > Req A Req B Inc Req B Bal Stmt Sheet Req B Stmt of Cash Flows Req C Prepare an statement of cash flows for the Year 1 accounting period. (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign.) YARD DESIGNS Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance EA Req B Bal Sheet 0 0 0 Req C > Req A Req B Inc Req B Bal Stmt Sheet Req B Stmt of Cash Flows Req C Ignoring all other future events, what is the amount of service revenue that would be recognized in Year 2? (Do not round intermediate calculations.) Service revenue to be recognized in Year 2 Req B Stmt of Cash Flows Req C >