Deferred Revenue Question

I'll assume that the $80 is incurred entirely prior to month 3 when payment is received. Either way, this question reads like it's getting at the differences between cash and accrual accounting. Below is how I’d walk through it. It reads like longer than it actually is

• Prior to month 3
  • Income Statement
    • No changes
  • Cash Flow Statement
    • Cash from operations down $80 - increase in working capital from the cost to generate the report
  • Balance Sheet
    • Asset Side
      • Cash down $80
      • Non-cash asset up $80
• At month 3 on payment
  • Income Statement
    • No change
  • Cash Flow Statement
    • Cash from operations up $100 - increase in deferred revenue
  • Balance Sheet
    • Asset Side
      • Cash up $100
    • Liability Side
      • Deferred Revenue up $100
• At month 4
  • Income Statement
    • Revenue up $100
    • COGS up $80
    • EBT up $20
    • Taxes up $4
    • Net Income up $16
  • Cash Flow Statement
    • $16 Net Income 
    • $80 reduction in non-cash asset
    • $(100) reduction in deferred Revenue
    • Cash from Operations down $4
  • Balance Sheet
    • Asset Side
      • Cash down $4
      • Non-cash asset down $80
    • Liability Side
      • Deferred Revenue down $100
    • Equity
      • Retained Earnings up $16