How to solve

Exercise $1-1($Algo$)$ Accrual accounting $[$LO$1-2]$

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

$\backslash$table$[[,$Year $1,$Year $2],[$Amounts billed to clients for services rendered,$ $186,000,$$ $236,000],[$Cash collected from clients,$152,000,182,000],[$Cash disbursements:,,$],[$Salaries paid to employees for services rendered during the year,$82,000,92,000],[$Utilities$,26,000,32,000],[$Purchase of insurance policy,$57,600,0]]$

In addition, you learn that the firm incurred utility costs of $$31,000$ 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:

& $3.$ 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.

Prepare an income statement for each year according to the accrual accounting model.

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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.

Note: Net cash outflows should be indicated by a minus sign.

$\backslash$table$[[,$Year $1,$Year $2],[1.$ Net operating cash flow,,$],[3.$ Receivables,,$]]$