1. Performed counseling services for $18,800 cash. 2. On February 1, Year 1, paid $12,600 cash...

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1. Performed counseling services for $18,800 cash. 2. On February 1, Year 1, paid $12,600 cash to rent office space for the coming year. 3. Adjusted the accounts to reflect the amount of rent used during the year. Required: Based on this information alone: a. Record the events in accounts under an accounting equation. Note: Enter any decreases to account balances with a minus sign. Event LIFE, INCORPORATED Effect of Events on the Accounting Equation Assets 1. Performed services 2. Prepaid rent 3. Used rent Totals Cash 18,800 (12,600) $ 6,200 LIFE, INCORPORATED Income Statement For the Year Ended December 31, Year 1 Prepaid Rent 12,600 (11,550) 0 II |||| 1,050 = Stockholders' Equity Retained Earnings b. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period. Note: In statement of cash flows, cash outflows should be indicated with a minus sign. 18,800 (11,550) 7,250 Assets Total assets Liabilities Stockholders' Equity LIFE, INCORPORATED Balance Sheet As of December 31, Year 1 Total stockholders' equity Total liabilities and stockholders' equity LIFE, INCORPORATED 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 $ 69 $ 69 $ 0 0 0 0 0 0 c. Ignoring all other future events, what is the amount of rent expense that would be recognized in Year 2? Rent expense to be recognized in Year 2 1. Performed counseling services for $18,800 cash. 2. On February 1, Year 1, paid $12,600 cash to rent office space for the coming year. 3. Adjusted the accounts to reflect the amount of rent used during the year. Required: Based on this information alone: a. Record the events in accounts under an accounting equation. Note: Enter any decreases to account balances with a minus sign. Event LIFE, INCORPORATED Effect of Events on the Accounting Equation Assets 1. Performed services 2. Prepaid rent 3. Used rent Totals Cash 18,800 (12,600) $ 6,200 LIFE, INCORPORATED Income Statement For the Year Ended December 31, Year 1 Prepaid Rent 12,600 (11,550) 0 II |||| 1,050 = Stockholders' Equity Retained Earnings b. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period. Note: In statement of cash flows, cash outflows should be indicated with a minus sign. 18,800 (11,550) 7,250 Assets Total assets Liabilities Stockholders' Equity LIFE, INCORPORATED Balance Sheet As of December 31, Year 1 Total stockholders' equity Total liabilities and stockholders' equity LIFE, INCORPORATED 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 $ 69 $ 69 $ 0 0 0 0 0 0 c. Ignoring all other future events, what is the amount of rent expense that would be recognized in Year 2? Rent expense to be recognized in Year 2

Answer rating: 100% (QA)

Answer Requirement a LIFE Inc Event Cash Prepaid rent Retained earnings 1 18800 18800 ... View the full answer