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
Amounts billed to clients for services rendered	$	174,000		$	224,000
Cash collected from clients		162,000			192,000
Cash disbursements
Salaries paid to employees for services rendered during the year		92,000			102,000
Utilities		31,000			42,000
Purchase of insurance policy		60,600			0

In addition, you learn that the firm incurred utility costs of $36,000 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. Req 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.) 1. Net operating cash flow 3. Receivables Year 1 Year 2 Req 1 and 3 Prepare an income statement for each year according to the accrual accounting model. PETE, PETE, AND ROY Income Statements Year 1 Revenues Expenses: Salaries Utilities Req 2 Insurance Net income (loss) Year 2