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Listed below are several transactions that took place during the first two years of operations...

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Accounting

Listed below are several transactions that took place during the first two years of operations for the law firm of Perez Associates.
Year 1 Year 2
Amounts billed to clients for services rendered $ 170,000 $ 220,000
Cash collected from clients 160,000190,000
Cash disbursements:
Salaries paid to employees for services rendered during the year 90,000100,000
Utilities 30,00040,000
Purchase of insurance policy 60,0000
In addition, you learn that the firm incurred utility costs of $35,000 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.Complete this question by entering your answers in the tabs below.
Req 1 and 3Req 2
Prepare an income statement for each year according to the accrual accounting model.
Perez Associates
Income Statements
Year 1 Year 2
Revenues
Expenses:
Salaries
Utilities
Insurance
Net income (loss)

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