Exercise 1-1 (Algo) Accrual accounting [L01-2] LIsted below are several transactions that took place during the first twoo years of operations for the law fim of Pete, Pete, and Roy Year 1 Year 2 Amounes billed to clients fox services tendered $172,000 222,000 Cash col1ected from clients 161,000 191,000 Cash 4isbursesent Sal aries paid to enployees for services rendered during the year 91,000 101,000 Ueil ities 30, 500 41,000 Purchase of insurance policy 60,300 In addition, you learn that the firm incurred utility costs of $35,500 In year 1, that there were no liabilitles 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 recelvables from clients that the firm would show in its year1 and year 2 balance sheets prepared accordingtothe 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 Req 2 Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables from dients 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 2 Year 1 1. Net operating cash flow 3. Receivables 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 Expenses: Salaries Utilities Insurance Net income (loss)