Final answer:
The landlord's financial statements will show $5,400 on the statement of cash flows, $8,800 as revenue earned on the income statement, and a rent receivable of $3,400 on the balance sheet.
Step-by-step explanation:
If a landlord collected $5,400 cash from a tenant for December 2015's rent but the tenant's rent for December is $8,800, the correct financial statement treatment would be:
- $5,400 would appear on the statement of cash flows as the amount actually received in cash.
- $8,800 would appear on the income statement as rent revenue earned, assuming the landlord is using the accrual basis of accounting.
- The difference of $3,400 ($8,800 - $5,400), which is still owed by the tenant, would appear on the balance sheet as rent receivable.
Therefore, the correct option with respect to the landlord's financial statements is that $8,800 would appear on the income statement as rent revenue earned, and $3,400 would appear on the balance sheet as rent receivable (the difference between the actual rent charged and the amount collected).
Note: Options 'b' and 'd' are incorrect. Prepaid rent implies the tenant paid ahead, which is not applicable here, and the full rent amount does not directly appear on the statement of cash flows.