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Listed below are several transactions that took place during the first two years of operations...

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Accounting

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.

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