Answer questions "E3-20A". A,B,C,D,E,F.

During 2016, Nicholson Network, Inc., which designs network servers, earned revenues of $800 million. Expense, totaled $570 million. Nicholson collected all but $21 million of the revenues and paid $600 million on its expenses. Nicholson's top managers are evaluating 2016, and they ask you the following questions: a. Under accrual accounting, what amount of revenue should Nicholson Network report for 2016? How does the revenue principle help to answer these questions? b. Under accrual accounting, what amount of total expense should Nicholson Network report for 20167 Which accounting principle helps to answer this question? c. Redo parts a and b using the cash basis. Explain how the accrual basis differs from the cash basis. d. Which financial statement reports revenues and expenses? Which statement reports cash receipts and cash payments? (Learning Objectives 1, 3: Explain how accrual accounting differs from cash-basis accounting; adjust the accounts) An accountant made the following adjustments at number 31, the end of the accounting period: a. Prepaid insurance, beginning, $300. Payments for insurance during the period. $2, 900. Prepaid insurance, ending, $600. b. Interest revenue accrued, $2, 400. c. Unearned service revenue, beginning, $1, 600. Unearned service revenue, ending, $300. d. Depreciation, $5, 500. e. Employees' salaries owed for two days of a five-day work week; weekly payroll, $13,000. f. Income before income tax, $20,000. Income tax rate is 35%