Yard Designs (YD) experienced the following events in 2018, its first year of op

Question

Yard Designs (YD) experienced the following events in 2018, its first year of operation: 1. On October 1, 2018, YD collected $21,600 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 2018 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 2018 accounting period c. Ignoring all other future events, what is the amount of service revenue that would be recognized in 2019? Complete this question by entering your answers in the tabs below. Req B1 Inc Stmt Req B2 Bal Sheet Req B3 CF Stmt Req A Req C Record the events under an accounting equation. (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.) YARD DESIGNS Accounting Equations for the Year 2018 AssetsLiabilities Stockholders ul Retained Earnings Event Cash Unearned Revenue Event Adjusting

Explanation / Answer

Answer a. YARDS DESIGNS Accounting Equation for the Year 2018 Event Assets = Liabilities + Stockholders' Equity Cash = Unearned Revenue + Retained Earnings Event    21,600.00    21,600.00 Adjustment                   -      16,200.00               5,400.00 Answer b-1. YARDS DESIGNS Income Statement For the Year Ended Dec 31, 2018 Revenue Consulting Revenue      5,400.00 Expenses                   -   Net Income      5,400.00 Answer b-2. YARDS DESIGNS Balance Sheet As of Dec 31, 2018 Assets Current Assets Cash    21,600.00 Total Assets    21,600.00 Liabilities Current Assets Unearned Revenue    16,200.00 Total Liabilities    16,200.00 Stockholders' Equity Retained Earnings      5,400.00 Total Stockholders' Equity      5,400.00 Total Liabilities & Stockholders' Equity    21,600.00 Answer b-3. YARDS DESIGNS Statement of Cash Flows For the Year Ended Dec 31, 2018 Cash Flow from Operating Activities Net Profit      5,400.00 Add: Increase in unearned Revenue    16,200.00 Net Cash Flow from Operating Activities    21,600.00 Cash Flow from Investing Activities                   -   Cash Flow from Financing Activities                   -   Net Change in Cash    21,600.00 Beginning Cash Balance (Not Given)                   -   Ending Cash Balance    21,600.00 Answer c. Service Revenue to be Recognized in 2019 = $21,600 X 9/12 Service Revenue to be Recognized in 2019 = $16,200

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