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Comparing the Income Statement and the Statement of Cash Flows
On January 1, Campus Internet Connection opened for business across the street from Upper Eastern University. The company charges students a monthly fee of $20 and $1 for each hour they are online. During January, 500 students signed up for the service, and each will have until the fifth of the following month to pay the monthly fee. By the end of January, 200 students had paid the monthly fee. Student usage, payable at the time connected, was 3,000 hours during Jan- uary. Assume that Campus uses the accrual basis of accounting.
Required
1. Prepare the Revenues section of Campus's income statement for the month of January.
2. Prepare the Cash Receipts section of Campus's statement of cash flows for the month of January.
3. In addition to the Cash account, what other account will appear on Campus's balance sheet at the end of January? What amount will be in this account?
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