Yard Designs (YD) experienced the following events in Year 1, its first year of operation:

1. On October 1, Year 1, YD collected $31,200 for consulting services it agreed to provide during the next 12 months.
2. Adjusted the accounts to reflect the amount of consulting service revenue recognized in Year 1.

Required

Based on this information alone:

1. Record the events under an accounting equation.
2. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period.
3. Ignoring all other future events, what is the amount of service revenue that would be recognized in Year 2?

A.

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
• Req C

Record the events under an accounting equation. (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign. Not all cells require input.)

YARD DESIGNS
Accounting Equation Year 1
	Assets	=	Liabilities	+	Stockholders Equity
Event	Cash	=	Unearned Revenue	+	Retained Earnings
Event		=		+
Adjusting		=		+
		=		+

B1.Prepare an income statement for the Year 1 accounting period. (Do not round intermediate calculations.)

YARD DESIGNS
Income Statement
For the Year Ended December 31, Year 1

B2.Prepare a balance sheet for the Year 1 accounting period. (Do not round intermediate calculations.)

YARD DESIGNS
Balance Sheet
As of December 31, Year 1
Assets
Total assets
Liabilities
Total liabilities
Stockholders Equity
Total stockholders equity
Total liabilities and stockholders equity

B3. Prepare the statement of cash flows for the Year 1 accounting period. (Do not round intermediate calculations. Enter cash outflows with a minus sign.)

YARD DESIGNS
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
Ending cash balance

C. Ignoring all other future events, what is the amount of service revenue that would be recognized in Year 2? (Do not round intermediate calculations.)

Service revenue to be recognized in Year 2