During Year 1, Chung Corporation earned $8,000 of cash revenue and accrued $5,000 of salaries expense.

Required

Record the events in general ledger accounts under an accounting equation before satisfying the requirements.) Based on this information alone:

a. Prepare the December 31, Year 1, balance sheet.

b. Determine the amount of net income that Chung would report on the Year 1 income statement.

c. Determine the amount of net cash flow from operating activities that Chung would report on the Year 1 statement of cash flows.

d. Why are the answers to Requirements b and c different?