Cash collected from clients Cash disbursements; Salaries paid to employees for services rendered during the year Utilities Purchase of insurance policy In addition, you learn that the firm incurred utility costs of $37,000 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: 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. Complete this question by entering your answers in the tabs below. Req 1 and 3. Prepare an income statement for each year according to the accrual accounting model, Perez Associates Income Statements Revenues Expenses Salaries Utilities Insurance Req 2 Answer is complete but not entirely correct. Net income (oss) Year 1 $ 178,000 Year 2 $ 228,000 164,000 94,000 32,000 61,200 94,000 37,000 20,400 26.600 S 194,000 104,000 44,000 104,000 44,000 20,400 50,000
Cash collected from clients Cash disbursements; Salaries paid to employees for services rendered during the year Utilities Purchase of insurance policy In addition, you learn that the firm incurred utility costs of $37,000 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: 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. Complete this question by entering your answers in the tabs below. Req 1 and 3. Prepare an income statement for each year according to the accrual accounting model, Perez Associates Income Statements Revenues Expenses Salaries Utilities Insurance Req 2 Answer is complete but not entirely correct. Net income (oss) Year 1 $ 178,000 Year 2 $ 228,000 164,000 94,000 32,000 61,200 94,000 37,000 20,400 26.600 S 194,000 104,000 44,000 104,000 44,000 20,400 50,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cash collected from clients
Cash disbursements;
Salaries paid to employees for services rendered during the year
Utilities
Purchase of insurance policy
In addition, you learn that the firm incurred utility costs of $37,000 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:
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.
Complete this question by entering your answers in the tabs below.
Req 1 and 3
Revenues
Expenses
Salaries
Utilities
Req 2
Prepare an income statement for each year according to the accrual accounting model.
Perez Associates
Income Statements
Insurance
Net income (loss)
Answer is complete but not entirely correct.
Year 1
$ 178,000
94,000
37.000
20,400
S 26,600
100
Year 2
$ 228,000
164,000
94,000
32,000
61,200
104,000
44,000
20,400
$ 50,600
194,000
104,000
44,000
1000
comp
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