Lay Perfect Pillow Company sells specialty pillows and accessories to customers. Its fiscal year ends on December 31. The following transactions occurred in the current year: State if there was an increase, decrease or no change on net income under cash accounting and accrual accounting.

1.Purchased $250,000 of new pillow inventory; paid $90,000 in cash and owed the rest on account.

2.Paid employees $180,300 in wages for work during the year; an additional $3,700 for the current year's wages will be paid in January of the next year.

3.Paid 80,000 for a 12 month insurance policy that runs from Nov- October. Include the effects of the adjusting entry on Dec. 31if any

4.Lays sold merchandise for 400,000 split with cash and on the account. Lays purchased this prior years for 350000 during a different accounting period.

5.Made 20,000 on gift cards. None were redeemed by the end of the year.