Listed below are several transactions that took place during the first two years of operations for the law firm of Perez Associates.

Year $1$ Year $2$

Amounts billed to clients for services rendered $ $176,000$ $ $226,000$

Cash collected from clients $157,000187,000$

Cash disbursements:

Salaries paid to employees for services rendered during the year $87,00097,000$

Utilities $28,50037,000$

Purchase of insurance policy $59,1000$

In addition, you learn that the firm incurred utility costs of $$33,500$ 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.

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 mode. Then, Preare an income statement.