The following events apply to 2005, the first year ofoperations of ITS Consulting Services
1. Acquired $20, 000 cash from the issue of common stock
2. Paid $12, 000 cash in advance from the issue of commonstock
3. provided services for $25,000 cash
4. Adjusted the records to recognize the use of the officespace. The one-year contract started on March 1, 2005. Theadjusment was made as of December 31, 2005
A. write an accounting equation and record the effects of eachaccounting event under the appropriate general ledger accountheadings.
B. prepare an income statement and statement of cash flows forthe 2005 accounting period.
C. explain the difference between the amount of net income and amount of net cash flow from operating activities.