Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need answers to the last two parts During 2016, Gibson Network, Inc., which designs network servers, earned revenues of $740 million. Expenses totaled $520

image text in transcribedI need answers to the last two parts

During 2016, Gibson Network, Inc., which designs network servers, earned revenues of $740 million. Expenses totaled $520 million. Gibson collected all but $21 million of the revenues and paid $570 million on its expenses. Requirements Gibson's top managers are evaluating 2016, and they ask you the following questions: a. Under accrual accounting, what amount of revenue should Gibson Network report for 2016? How does the revenue principle help to answer these questions? b. Under accrual accounting, what amount of total expense should Gibson 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 Gibson 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 $ 740 million. The revenue principle says to record revenue when it has been earned regardless of when cash is collected Therefore, the amount of revenue what amount of total expense should Gibson Network report for 2016? Which accounting principle helps to answer this reported for the year is $ million. The recognizes expenses in the same period in which any related revenues are earned

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

How efficient is your learning and development department?

Answered: 1 week ago