xercise 3-7A (Algo) Unearned items on financial statements LO 3-3 Yard Designs (YD) experienced the following events in Year 1: Its first year of operation: 1. On October 1, Year 1, YD 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. (Enter any decreases to account balances with a minus sign.) YARD DESIGNS Accounting Equations for the Year 1 Assets Liabilities Cash Unearnod Revenue 24,000 = 24,000 Event Stockholders Equity Retained Earnings Advance payment Revenue earned 10 24,000 24 000 0 b. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period. In statement of cash flows, cash outflows should be indicated with a minus sign.) YARD DESIGNS Income Statement For the Year Ended December 31, Year 1 Accounts payable Accounts receivable $ 0 YARD DE SIGNS Balance Sheet As of December 31. Year 1 Assets GA $ 0 Total assets Liabilities $ 0 Total liabilities Stockholders' Equity 0 $ 0 Total stockholders' equity Total liabilities and stockholders' equity YARD DESIGNS Statement of Cash Flows For the Year Ended December 31. Year 1 Cash flows from operating activities $ 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash 0 $ 0 Ending cash balance c. Ignoring all other future events, what is the amount of service revenue that would be recognized in Year 2? Service revenue to be recognized in Year 2