Cash-Basis Accounting vs. Accrual Accounting Listed below are the transactions that took place for the first couple of years for the CSI firm of Gomez & Garcia. Year 1 $100,000 75,000 Year 2 $175,000 165,000 Amounts billed (A/R) to clients for services rendered Cash collected from clients Cash disbursements (Expenses): Purchase of hurricane insurance policy Salaries paid to employees for the year Utilities 30,000 50,000 15,000 -0- 70,000 30,000 . Other information about the firm: There are no liabilities at the end of year 2 There are no anticipated bad debts on receivables The insurance policy covers a two year period Actual utility costs for year I were $20,000 . . Required: 1. Calculate the net operating cash flow for years 1 and 2. 2. Prepare an income statement for each year on an accrual accounting basis. 3. Determine the amount of receivables from clients that the firm would show in its year 1 and year 2 balance sheets prepared on an accrual accounting basis