Martin & Mark operate the law office of M&M, PC. Transactions that took place in 2012 and 2013 are below:

Utility costs incurred in 2012 were $40,000. There were no liabilities at the end of 2013 and there were no anticipated bad debts on receivables.

Answer the following:
a. Calculate the net operating cash flow for 2012 and 2013. Hint: This is cash basis accounting.
b. Prepare income statement for years 2012 and 2013 using accrual basis accounting.
c. Determine the receivables from customers that the company would show on its 2012 and 2013 balance sheets prepared using accrual basis accounting.

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2013 2012 Amounts billed to customers for law services Cash collected from customers Cash disbursements for two years rent $380,000 $440,000 450,000 330,000 60,000 Cash disbursements for salaries paid to employees 200,000 Cash disbursements for travel Cash disbursements for travel utilities 210,000 50,000 60,000 30,000 50,000