Exercise 3-7B Unearned items on financial statements Interior Design Consultants (IDC) experienced the following events in Year 1, its first year of opera- tion: 1. On October 1, Year 1, IDC collected $24,000 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? EXERCISE 3-7B a. Interior Design Consultants Year 1 +Stockholders Event Assets= Cash = Liabilities 'Equity Unearned Retained Revenue Earnings Coll. Unearned rev Recog. revenue b. Assets: Interior Design Consultants Income Statement For the Year Ended December 31, Year 1 Revenue Expense Net Income Interior Design Consultants Balance Sheet As of December 31, Year 1 Total Assets Liabilities: Total Liabilities Stockholders' Equity: Total Stockholders' Equity Total Liab. and Stockholders' Equity Interior Design Consultants 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 Plus: Beginning Cash Balance Ending Cash Balance C. months of unearned revenue from Year will be recognized in Year equaling $