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Listed below are several transactions that took place during the second and third years of operations for RPG Consulting.
  
 Year 2Year 3
  Amounts billed to customers for services rendered$350,000 $450,000 
  Cash collected from credit customers 260,000  400,000 
  Cash disbursements:      
       Payment of rent 80,000  0 
       Salaries paid to employees for services rendered during the year 140,000  160,000 
       Travel and entertainment 30,000  40,000 
       Advertising 15,000  35,000 
  
     In addition, you learn that the company incurred advertising costs of $25,000 in year 2, owed the advertising agency $5,000 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated bad debts on receivables, and the rent payment was for a two-year period, year 2 and year 3.
  


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