Connect Help Save & E Saved homework Exercise 1-1 (Algo) Accrual accounting [LO1-2) Listed below are several transactions that took place during the first two years of operations for the law firm of Pete, Pete, and Roy. Year 1 Year 2 $186,000 $236,000 168,000 198,000 Amounts billed to clients for services rendered Cash collected from clients Cash disbursements Salaries paid to employees for services rendered during the year Utilities Purchase of insurance policy 98,000 34,000 62,400 108,000 48,000 @ In addition, you learn that the firm incurred utility costs of $39,000 in year 1, that there were no liabilities at the end of year 2, no anticipated bad debts on receivables, and that the insurance policy covers a three-year period. Required: 1. & 3. Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables from clients that the firm would show in its year 1 and year 2 balance sheets prepared according to the accrual accounting model. 2. Prepare an income statement for each year according to the accrual accounting model Complete this question by entering your answers in the tabs below. Req 1 and 3 Reg 2 Prepare an income statement for each year according to the accrual accounting model. Prev 1 of 10 Next > MU In addition, you learn that the firm incurred anticipated bad debts on receivables, and that the insurance policy covers a three-year period. Required: 1. & 3. Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables from clients that the firm would show in its year 1 and year 2 balance sheets prepared according to the accrual accounting model. 2. Prepare an income statement for each year according to the accrual accounting model. Complete this question by entering your answers in the tabs below. Reg 1 and 3 Reg 2 Calculate Ihe net operating cash flow for years 1 and 2 and determine the amount of receivables from clients that the firm would show in its year 1 and year 2 balance sheets prepared according to the accrual accounting model. (Net cash outflows should be indicated by a minus sign.) Year 1 (26,400) Year 2 42.000 $ $ 1. Net operating cash flow 3. Receivables ROOM Req2 > Required: 1. & 3. Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables from show in its year 1 and year 2 balance sheets prepared according to the accrual accounting model. 2. Prepare an income statement for each year according to the accrual accounting model. Complete this question by entering your answers in the tabs below. Req 1 and 3 Req 2 Prepare an income statement for each year according to the accrual accounting model. Year 2 236,000 PETE, PETE, AND ROY Income Statements Year 1 Revenues 186,000 $ Expenses: Salaries (98,000) Utilities (39,000) Insurance 20,800 Net income (loss) $ 28,200 (108,000) (20,800)
