PA4 4 Identifying and Preparing Adjusting Journal Entries LO 4 1, LO 4 2, LO 4 3, LO 4 6 The following information applies to the questions displayed below Vals Hair Emporium operates a hair salon Its unadjusted trial balance as of December 31, 2018, follows, along with information about selected accounts Account Names Debit Credit Further Information Cash $ 3,800 As reported on December 31 bank statement Supplies 4,300 Based on count, only $1,300 of supplies still exist Prepaid Rent 6,000 This amount was paid November 1 for rent through the end of January Accounts Payable $ 1,500 This represents the total amount of bills received for supplies and utilities through December 15 Val estimates that the company has received $450 of utility services through December 31 for which it has not yet been billed Salaries and Wages Payable 0 Stylists have not yet been paid $150 for their work on December 31 Income Tax Payable 0 The company has paid last years income taxes but not this years taxes Common Stock 2,000 This amount was contributed for common stock in prior years Retained Earnings 900 This is the balance reported at the end of last year Service Revenue 75,800 Customers pay cash when they receive services Salaries and Wages Expense 29,100 This is the cost of stylist wages through December 30 Utilities Expense 12,200 This is the cost of utilities through December 15 Rent Expense 20,000 This years rent was $2,000 per month Supplies Expense 4,800 This is the cost of supplies used through November 30 Income Tax Expense 0 The company has an average tax rate of 30 Totals $ 80,200 $ 80,200 PA4 4 Part 1 Required Prepare the (preliminary) unadjusted net income statement for the year ended December 31, 2018 PA4 4 Part 4 4 a Prepare the adjusted net income that the company should report for the year ended December 31, 2018 4 b By what dollar amount did the adjustments in requirement (3) cause net income to increase or decrease

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PA4-4 Identifying and Preparing Adjusting Journal Entries [LO 4-1, LO 4-2, LO 4-3, LO 4-6] [ The following information applies to the questions displayed below.

PA4-4 Identifying and Preparing Adjusting Journal Entries [LO 4-1, LO 4-2, LO 4-3, LO 4-6]

[The following information applies to the questions displayed below.]

Vals Hair Emporium operates a hair salon. Its unadjusted trial balance as of December 31, 2018, follows, along with information about selected accounts.

Account Names	Debit		Credit		Further Information
Cash	$	3,800			As reported on December 31 bank statement.
Supplies		4,300			Based on count, only $1,300 of supplies still exist.
Prepaid Rent		6,000			This amount was paid November 1 for rent through the end of January.
Accounts Payable			$	1,500	This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $450 of utility services through December 31 for which it has not yet been billed.
Salaries and Wages Payable				0	Stylists have not yet been paid $150 for their work on December 31.
Income Tax Payable				0	The company has paid last years income taxes but not this years taxes.
Common Stock				2,000	This amount was contributed for common stock in prior years.
Retained Earnings				900	This is the balance reported at the end of last year.
Service Revenue				75,800	Customers pay cash when they receive services.
Salaries and Wages Expense		29,100			This is the cost of stylist wages through December 30.
Utilities Expense		12,200			This is the cost of utilities through December 15.
Rent Expense		20,000			This years rent was $2,000 per month.
Supplies Expense		4,800			This is the cost of supplies used through November 30.
Income Tax Expense		0			The company has an average tax rate of 30%.
Totals	$	80,200	$	80,200

PA4-4 Part 1

Required:

Prepare the (preliminary) unadjusted net income statement for the year ended December 31, 2018.

PA4-4 Part 4

4-a. Prepare the adjusted net income that the company should report for the year ended December 31, 2018.
4-b. By what dollar amount did the adjustments in requirement (3) cause net income to increase or decrease?