Exercise 1-1 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 $188,000 $238,000 169,000 199,000 Amounts billed to clients for services rendered Cash collected from clients Cash disbursements Salaries Utilities Purchase of insurance policy 393.0 paid to employees for services rendered during the year 99,000 109,000 34,500 49, 000 62,700 In addition, you learn that the company incurred utility costs of $39,500 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 company 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