CONpletedd so far. It 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 Amounts billed to clients for services rendered Cash collected from clients Year 2 $174,000 $224,000 192,000 162,000 Cash disbursements Salaries paid to employees for services rendered during the year Utilities 92,000 31,e00 60,600 102,000 42,000 Purchase of insurance policy In addition, you learn that the firm incurred utility costs of $36,000 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. Answer is complete but not entirely correct. 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. PETE, PETE, AND ROY Income Statements Year 1 Year 2 Revenues 174,000 224,000 Expenses: 92.000 102,000 Salaries apter 1 Connect Saved Check my work mode: This shows whet is correct or incorrect for the work you have completed so fam 33 In addition, you learn that the firm incurred utility costs of $36,000 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. otnts Answer is complete but not entirely correct. 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. PETE, PETE, AND ROY Income Statements Year 1 Year 2 Revenues 174,000 S 224,000 Expenses 102.000 92,000 36,000 20,200 Salaries Usilities 36,500 20,200 65.300 Insurance Net income (loss) 25,800 Req 1 and 3 Req 2