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E3-19A (book/static) During 2016, Nicholson Network, Inc., which designs network​ servers, earned revenues of $ 800million. Expenses totaled $ 570 million. Nicholson collected all but $ 21million of the revenues and paid $ 600 million on its expenses. Requirements 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 2016? 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? Requirement a. Under accrual​ accounting, what amount of revenue should Nicholson Network report for 2016? How does the revenue principle help to answer these​ questions? The amount of revenue that should be reported for the year is $_______________ Million. The revenue principle says to record revenue when it has been ____________▼collected earned recorded ​, regardless of when ___________▼cash is collected revenue is earned sold inventory is delivered . Therefore, the amount of revenue reported is what Nicholson ___________.▼collected earned paid E3-22A (book/static) Dellroy Rentals Company faced the following situations. A. The business has interest expense of $ 3,200 that it must pay early in January 2017B. Interest revenue of $4,100 has been earned but not yet received.C. On July 1, 2016, when the business collected $12,000 rent in​ advance, it debited Cash and     credited Unearned Rent Revenue. The tenant was paying for two​ years’ rent.D. Salary expense is ​$6,100 per daylong dash Monday through Friday long dash and the business pays employees each Friday. For the purpose of this​ calculation, assume December 31 falls on a Thursday.E. The unadjusted balance of the Supplies account is $3,200. The total cost of supplies on hand is $ 1,300.F. Equipment was purchased on January 1 of this year at a cost of $180,000 The​ equipment’s useful life is five years. There is no residual value. Record depreciation for this year and then determine the​ equipment’s book value. Requirement 1. Journalize the adjusting entry needed at December 31, 2016. for each situation. Consider each fact separately. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.) a. The business has interest expense of $ 3,200 that it must pay early in January 2017.. Journal Entry Accounts Debit Credit a. E3-24A (book/static) The adjusted trial balance of Honeybell, Inc., follows. Honeybell, Inc. Adjusted Trial Balance December 31, 2016 (Amounts in thousands) Account Debit Credit Cash $3,900 Accounts receivable 1,400 Inventories 2,200 Prepaid expenses 1,800 Property, plant, and equipment 16,700 Accumulated depreciation-property, plant, and equipment $2,800 Other assets 9,500 Accounts payable 7,400 Income tax payable 400 Other liabilities 2,500 Common stock 14,600 Retained earnings (beginning, December 31, 2015) 5,900 Dividends 1,300 Sales revenue 41,200 Cost of goods sold 25,500 Selling, administrative, and general expenses 10,500 Income tax expense 2,000 Total $74,800 $74,800 Requirement 1. Prepare Honeybell, Inc.’s single-step income statement and statement of retained earnings for the year ended December​ 31, 2016, and its balance sheet on that date. ​Let’s start by completing the single step income statement. ​(If a box is not used in the income statement leave the box​ empty; do not select a label or enter a​ zero.) Honeybell, Inc. Income Statement Year Ended December 31, 2016 Thousands Revenues: $ Expenses: ————— $ E3-25A (book/static) The adjusted trial balances of Victory Corporation at August 31, 2016, and August 31, 2015, include these amounts​ (in millions): 2016 2015 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $470 $290 Prepaid insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 460 Accrued liabilities payable (for other operating expenses) . . . . 760 650 Victory Corporation complete these transactions​ (in millions) during the year ended August​31, 2016.Victory completed these transactions​ (in millions) during the year ended August 31, 2016. Collections from customers . . . . . . . . . . . . . . . . . . $20,800 Payment of prepaid insurance . . . . . . . . . . . . . . . . 460 Cash payments for other operating expenses . . . . 4,600 RequirementCompute the amount of sales​ revenue, insurance​ expense, and other operating expenses to report on the income statement for the year ended August 31, 2016. The sales revenue for the year ended August 31, 2016 is $ E3-28A (book/static) The unadjusted trial balance and income statement amounts from the December 31 adjusted trial balance of Winwood Production Company follow. Winwood Production Company Unadjusted From the Adjusted Account Trial Balance Trial Balance Cash 13,300 Prepaid rent 1,600 Equipment 45,000 Accumulated depreciation-equipment 3,300 Accounts payable 4,900 Salary payable Unearned service revenue 9,200 Income tax payable Notes payable, long-term 16,000 Common stock 8,400 Retained earnings 11,400 Dividends 1,300 Service revenue 13,600 19,900 Salary expense 4,500 5,200 Rent expense 1,100 1,900 Depreciation expense-equipment 400 Income tax expense 1,200 Total 66,800 66,800 8,700 19,900 Journal Entry Date Accounts Debit Credit Dec 31 Unearned Service Revenue 6,300 Service Revenue 6,300 Dec 31 Salary Expense 700 Salary Payable 700 Dec 31 Rent Expense 800 Prepaid Rent 800 Dec 31 Depreciation Expense 400 Accumulated Depreciation—Equipment 400 Dec 31 Income Tax Expense 1,200 Income Tax Payable 1,200 Requirement1. Use the data in the partial worksheet to prepare Winwood Production Company’s classified balance sheet at December 31 of the current year. Use the report format. First you must compute the adjusted balance for several of the​ balance-sheet accounts2. Compute Winwood Production Company’s net working​ capital, current​ ratio, and debt ratio at December 31. A year​ ago, net working capital was $ 3,900, the current ratio was 1.40, and the debt ratio was 0.64. Indicate whether the​ company’s ability to pay its debts long dash both current and total long dash improved or deteriorated during the current year.Requirement 1. Use the data in the partial worksheet to prepare Winwood Production Company’s classified balance sheet at December 31 of the current year. Use the report format. First you must compute the adjusted balance for several of the​ balance-sheet accounts. Let’s prepare the balance sheet for Winwood Production Company. (If a box is not used in the balance sheet leave the box​ empty; do not select a label or enter a​ zero.) Winwood Production Company Balance Sheet December 31 Assets Less: