Required: 1. & 3. Calculate the net operating cash flow for years 1 and 2 and de

ID: 2401596 • Letter: R

Question

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.

With showing all the right steps.Thanks

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 i Year 2 $184,98 $234,80e 153,99e 183,99e 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 83,99e 93,998 26,5ee 33,ee 57,9e0 In addition, you learn that the company Incurred utility costs of $31,500 In year 1, that there were no liablities at the end of year 2, no anticlpated bad debts on recelvables, and that the Insurance policy covers a three-year period. Requlrec 1. & 3. Calculate the 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. net operating cashf for years 1 and 2 and determine the amount of recelvables from clients that the company 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 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.) 1. Net t operating cash fiow 3. Receivables

Explanation / Answer

1&3

YEAR 1

YEAR 2

NET OPERATING CASH FLOWS

(45900)

57000

RECIEVABLES

31000

51000

Net operating cash flows – Year 1 =153000-83000-26500-31500-57900

=(45900)

Year 2 =183000-93000-33000

=57000

Recievables – Year 1 = 184000-153000

=31000

Year 2 =234000-183000

=51000

INCOME STATEMENT

Year 1

Year2

REVENUE

184000

234000

EXPENSES:

SALARIES

(83000)

93000

UTILITIES

(58000)

33000

INSURANCE

(57900)

NET INCOME (LOSS)

(14900)

108000