For the past two years, Swen Johannsen, owner/general manager of Swen's Fine Duds, a local men's clothing store, has fought to stay in business. In the face of increasing competition, Swen has tried several tactics: aggressively promoting price-slashing sales to drive his competitors' customers to his doors; attempting to cut costs by leveling out sales and inventory through seasonal sales; as well as lining up contracts with wholesalers in advance of seasonal rushes (e. g., summer swimwear) to prevent inventory depletion. He has even recruited the president of the chamber of commerce to sit on his board. None of these tactics have been successful. Now, Swen is considering a deviation from his current business to one that might be more suitable, perhaps a formal wear/tuxedo rental and retail shop or a boutique Western wear store. Swen is using as his final tactic.

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 2amounts billed to clients for services rendered $ 170,000 $ 220,000 cash collected from clients 160,000 190,000 cash disbursements salaries paid to employees for services rendered during the year 90,000 100,000 utilities 30,000 40,000 purchase of insurance policy 60,000 0 in addition, you learn that the company 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.required: 1. & 3. 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.2. prepare an income statement for each year according to the accrual accounting model.