Problem: Module 1 Textbook Problem 9 Learning Objective: 1-10 Show how accounting for prepaid items affects financial statements Life, Inc., experienced the following events in Year 1, its first year of operation: 1. Performed counseling services for $20,400 cash. 2. On February 1. Year 1. paid $13,800 cash to rent office space for the coming year. 3. Adjusted the accounts to reflect the amount of rent used during the year 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 rent expense that would be recognized in Year 2? Complete this question by entering your answers in the tabs below. Req A Req B1 Inc Stmt Req B2 Bal Sheet Req B3 OF Stmt Reg C Barned the vente vinder an accountinn austinn notun intermediate alline Shrer any Complete this question by entering your answers in the tabs below. Req A Req B1 Inc Stmt Req B2 Bal Sheet Reg B3 CF Stmt Reg C Record the events under an accounting equation. (Do not round intermediate calculations balances with a minus sign.) LIFE, INC. Effect of Events on the Accounting Equation Assets Event Cash Prepaid Rent Stockholders Equity Retained Earnings 20.400 20.400 1. Performed counseling services 2. Prepaid rent 3. Used rent Totals (13 800) 13 800 = 13.794 = 27 594 = 6.600 (10 350 10.050 Recife Stumt Reg A Req B1 Inc Stmt Req B2 Bal Sheet Req B3 CF Stmt Reg C Prepare an income statement for the Year 1 accounting period. (Do not round intermediate calculations.) LIFE INC. Income Statement For the Year Ended December 31. Year 1 Revenue $ 20 400 Expense (10.350) Net income $ 10 050 Complete this question by entering your answers in the tabs below. Req A Req Bi Inc Stmt Req B2 Bal Sheet Reg B3 CF Stmt Reg 0 Prepare a balance sheet for the Year 1 accounting period. (Do not round intermediate calcu LIFE, ING. Balance Sheet As of December 31, Year 1 Assets Cash Prepaid rent GA 34 200 3.450 $ 37 650 Total assets Liabilities Stockholders' Equity Common stock Retained earnings Total stockholders equity Total liabilities and stockholders equity S 10 37 650 GA 67 650 67 650 $ Complete this question by entering your answers in the tabs below. Req A Req B1 Inc Stmt Req B2 Bal Sheet Req B3 CF Stmt Reg C Prepare the statement of cash flows for the Year 1 accounting period. (Do not round intermediate calculations outflows with a minus sign.) LIFE, INC. Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities Cash receipt from revenue $ 20.400 Cash payment for rent 13.800 $ 34.200 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 0 0 34 200 0 34.200 S S Dostu U LIRIS ITILIT DIUITE 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 rent expense that would be recognized in Year 2? Complete this question by entering your answers in the tabs below. Rega Req B1 Inc Stmt Req B2 Bal Sheet Reg B3 CF Stmt Rega Ignoring all other future events, what is the amount of rent expense that would be recognized in Year 2? (Do not round intermediate calculations) Rent expense to be recognized in Year 2 ( Req B3 CF Simt