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 $ 180,000 $ 230,000
Cash collected from clients 155,000 185,000
Cash disbursements Salaries paid to employees for services rendered during the year 85,000 95,000
Utilities 27,500 35,000
Purchase of insurance policy 58,500 0
In addition, you learn that the firm incurred utility costs of $32,500 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. 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.

Income statement for year 1

Service revenue                                       $180,000

Operating expenses:

Net income                                                 $43,000

Income statement for year 2

Service revenue                                       $230,000

Operating expenses:

Net income                                                 $85,500

Year 1 accounts receivable balance = $180,000 - $155,000 = $25,000

Year 2 accounts receivable balance = $230,000 - $185,000 + $25,000 = $70,000

Cash flows from operating activities year 1:

Net income $43,000

Adjustments to net income:

Increase in accounts payable $5,000

Increase in accounts receivable ($25,000)

Increase in prepaid insurance ($39,000)

Net cash provided by operating activities ($16,000)

Cash flows from operating activities year 1:

Net income $85,500

Adjustments to net income:

Decrease in prepaid insurance $19,500

Increase in accounts receivable ($45,000)

Decrease in accounts payable ($5,000)

Net cash provided by operating activities $55,000

the answer is: c.that person might be arrested and deported

filling w-4 form incorrectly usually would rise suspicions from government's auditors. when they notice such mistakes, they would send their teams to investigate the situation further.

if those investigation teams believe that the incorrectness is done on purpose (with malicious intent), that person can be arrested or deported

i believe the answer is: streets and roads

public property refers to the property that can be used by all legal citizens in a certain country. the public property was created and maintain using the government budget that allocated specifically for it. the budget itself come from the citizen's income tax payment.