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Business · Accounting
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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 $ 182,000 $ 240,000
Cash collected from clients 150,000 180,000
Cash disbursements
Salaries paid to employees for services rendered during the year 80,000 90,000
Utilities 25,000 30,000
Purchase of insurance policy 57,000 0


In addition, you learn that the company incurred utility costs of $30,000 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.

Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables from clients that the company 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
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