On July 1, 2019 Magk's Catering Service received pre-payment for daily lunch catering services from July 1, 2019 until June 30, 2020 for $240,000. Mack accounts for all receipts of cash as revenue at time of receipt. Which of the following is an effect on Mack's Catering Service's financial statement for the calendar year ended December 31, 2019 if they do not make any adjusting entries related to this service contract Stockholders' Equity overstated by $240,000 and Liabilities understated by $240,000. Stockholders' Equity overstated by $120,000 and Liabilities understated by $120,000 O No effect, the financial statements wold be correct. Stockholders' Equity understated by $120,000 and Liabilities understated by $120,000