Life, Incorporated, experienced the following events in Year 1, its first year of operation:

Performed counseling services for $25,200 cash.

On February 1, Year 1, paid $17,400 cash to rent office space for the coming year.

Adjusted the accounts to reflect the amount of rent used during the year.

Required:

Based on this information alone:

Record the events under an accounting equation.

Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period.

Ignoring all other future events, what is the amount of rent expense that would be recognized in Year 2

Complete this question by entering your answers in the tabs below.

• Req A
• Req B1 Income statement
• Req B2 Balance sheet
• Req B3 Statement of cash flows
• Req C

Prepare a balance sheet for the Year 1 accounting period.

Note: Do not round intermediate calculations.

LIFE, INCORPORATED
Balance Sheet
As of December 31, Year 1
Assets
Cash	$17,400
Prepaid rent
Total assets		$17,400
Liabilities
Stockholders Equity
Total stockholders equity		$0
Total liabilities and stockholders equity		$0

Prepare the statement of cash flows for the Year 1 accounting period.

Note: Do not round intermediate calculations. Enter cash outflows with a minus sign.

LIFE, INCORPORATED
Statement of Cash Flows
For the Year Ended December 31, Year 1
Cash flows from operating activities:
Net cash flow from operating activities		$0
Cash flows from investing activities
Cash flows from financing activities
Net change in cash		0
Ending cash balance		$0

Complete this question by entering your answers in the tabs below.

• Req A
• Req B1 Income statement
• Req B2 Balance sheet
• Req B3 Statement of cash flows
• Req C

Ignoring all other future events, what is the amount of rent expense that would be recognized in Year 2? Note: Do not round intermediate calculations.

Rent expense to be recognized in Year 2