below are several transactions that took place during the first two years of
operations for the law firm of Pete, Pete, and Roy.
1 Year 2 Amounts billed to customers for services rendered $170,000 $220,000
Cash collected from customers 160,000 190,000 Cash disbursement Salaries paid
to employees for services rendered during the year 90,000 100,000 utilities
30,000 40,000 Purchase of insurance policy 60,000 -0-
addition, you learn that the company incurred utility costs of $35,000 in year
one, that there were no liabilities at the end of year two, 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.
Prepare an income statement for each year similar to Illustration 1-2 on page 8 according to the accrual accounting
Determine the amount of receivables from customers that the company would show
in its year 1 and year 2 balance sheets prepared according to the accrual
E 1-1 Accrual
accounting. Listed below are several transactions that took place during the
first two years of operations for the law firm of Pete, Pete, and Roy.