Raylan received a $60,000 cash advance payment on June 1, Year 1, for consulting services to be performed in the future. Services were to be provided for a one year term beginning June 1, Year 1.

Required
a. Record the June 1 cash receipt in T-accounts.
b. Record in T-accounts the adjustment required as of December 31, Year 1.

c. Show the preceding transaction and related adjustment in a horizontal statements model like the following one:

d. Determine the amount of net income on the Year 1 income statement. What is the amount of net cash flow from operating activities for Year 1?
e. What amount of liabilities would Raylan report on the Year 1 balance sheet?

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Income Statement Balance Sheet Statement of Cash Flows Assets Stk. Equlty Llab. Exp. = Net Inc. Rev.