Listed below are several transactions that took place during the first two years of operations for the accounting firm of Haskins and Price.

Year 1 Year 2

Amounts billed to customers for services

rendered................................................. $380,000 $440,000 Cash collected from customers ................. 330,000 450,000 Cash disbursements:

Payment of rent for two years................. 60,000 - 0 -

Salaries paid to employees for services rendered during the year....................... 200,000 210,000 Travel....................................................... 50,000 60,000

Utilities ................................................... 30,000 50,000

In addition, you learn that the company incurred utility costs of $40,000 in year one, that there were no liabilities at the end of year two, and no anticipated bad debts on receivables.

Required:

1 Calculate the net operating cash flow for years 1 and 2.

2. Prepare an income statement for each year according to the accrual accounting model.

3. Determine the amount of receivables from customers that the company would show on its year 1 and year 2 balance sheets prepared according to the accrual accounting model.