Answered: 2. Prepare an income statement for each…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

100%

9. 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 1	Year 2
Amounts billed to clients for services rendered	$	176,000	$	226,000
Cash collected from clients		163,000		193,000
Cash disbursements
Salaries paid to employees for services rendered during the year		93,000		103,000
Utilities		31,500		43,000
Purchase of insurance policy		60,900		0

In addition, you learn that the firm incurred utility costs of $36,500 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.

Required:
1. & 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.
2. Prepare an income statement for each year according to the accrual accounting model.

1. & 3. Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables trom clients that the firm 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.
Complete this question by entering your answers in the tabs below.
Reg 1 and 3
Reg 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. (Net cash outflows
should be indicated by a minus sign.)
Year 1
Year 2
1. Net operating cash flow
3. Receivables
< Req 1 and 3
Req 2 >

SITOW II Is yeai I dliu yeai z waldlice Siieets prepareu accoTUny w uie acciudi accuuiuny mouei.
2. Prepare an income statement for each year according to the accrual accounting model.
Complete this question by entering your answers in the tabs below.
Reg 1 and 3
Reg 2
Prepare an income statement for each year according to the accrual accounting model.
PETE, PETE, AND ROY
Income Statements
Year 1
Year 2
Revenues
Expenses:
Salaries
Utilities
Insurance
Net income (loss)
< Req 1 and 3
Req 2 >

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions