Homework 3. Chi Helps 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 $ 178,000 $220,000 164,000 194,000 Amounts billed to clients for services rendered Cash collected from cliente Cash disbursements Salaries paid to employees for services rendered during the year Utilities Purchase of insurance policy 94,000 32.000 61,200 104,000 44.000 Book In addition, you learn that the firm incurred utility costs of $37,000 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. Duences 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. Reg1 and 3 Reg 2 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. (Net cash outflows should be indicated by a minus sign.) Yeart Year 2 1. Net operating cash flow 3. Receivables Tk 3: Chi Saved Year 1 Year 2 $178,000 $228,000 164,000 194,000 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 94,000 32,000 61.200 104,000 44,000 In addition, you learn that the firm incurred utility costs of $37,000 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. PETE, PETE, AND ROY Income Statements Year 1 Year 2 Revenues Expenses Salaries Us Net income foss)
