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 $182,000 $240,000 150,000 180,000 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 80,000 25,000 57,000 90,000 30,000 In addition, you learn that the company incurred utility costs of $30,000 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 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. Complete this question by entering your answers in the tabs below. 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. Complete this question by entering your answers in the tabs below. Req 1 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 company 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 Year 2 1. Net operating cash flow 3. Receivables Req 1 and 3 Req 2 Prepare an income statement for each year according to ual accounting model. PETE, PETE, AND ROY Income Statements Year 1 $ 182,000 Year 2 240,000 $ Revenues Expenses: Salaries Utilities 80.000 30,000 19,000 83,000 90,000 25,000 19,000 Insurance Net income (loss) { $ Rond 3
