Answer:
balance sheet accounts receivable:
year 1 13,000
year 2 46,000
Cash flow year 1 year 2
collected from client 159,000 189,000
salaries paid (89,000) (99,000)
utilities (29,500) (39,000)
purhcase of insurance (59,700)
net (19,200) 51,000
Income statement year 1 year 2
Sales revenue 172,000 222,000
Salaries expense (89,000) (99,000)
Utilities expense (34,500) (34,500)*
Insurance expense (19,900) (19,900)
Net income 28,600 68,600
Explanation:
balance sheet accounts receivable:
year 1: sales - collected 172,000 - 159,000 = 13,000
year 2: beginning balance + sales - collected
13,000 + 222,000 - 189,000 = 46,000
Cash flow: we subtract from the amount collected the cash disbursements.
The income statment will be done based on the amount billed and the expenses accrued during each period, regardless of the time of collection/payment
*Utilities expense:
year 1 incurrent 34,500 cost and paid 29,000 so there is a 4,500 payable which is set on year 2.
*Insurance expense:
59,700 is thecost for three years, so we divide by three to get the value of one year. 59,700 / 3 = 19,900
