Required information 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.] Val's Hair Emporium operates a hair salon. Its unadjusted trial balance as of December 31, 2018, follows, along with information about selected accounts. Credit Account Names Cash Debit $ 4,200 Supplies 4,700 Prepaid Rent 7,200 Accounts Payable $ 1,700 0 Salaries and Wages Payable Income Tax Payable 0 Further Information As reported on December 31 bank statement. Based on count, only $1,500 of supplies still exist. This amount was paid November 1 for rent through the end of January. This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $490 of utility services through December 31 for which it has not yet been billed. Stylists have not yet been paid $200 for their work on December 31. The company has paid last year's income taxes but not this year's taxes. This amount was contributed for common stock in prior years. This is the balance reported at the end of last year. Customers pay cash when they receive services. This is the cost of stylist wages through December 30. This is the cost of utilities through December 15. This year's rent was $2,400 per month. This is the cost of supplies used through November 30. The company has an average tax rate of 30%. Common Stock 2,400 Retained Earnings 800 Service Revenue 82,500 29,500 Salaries and Wages Expense Utilities Expense 12,600 Rent Expense Supplies Expense 24,000 5,200 Income Tax Expense 0 Totals $87,400 $ 87,400 1. Prepare the (preliminary) unadjusted net income statement for the year ended December 31, 2018. VAL'S HAIR EMPORIUM Unadjusted Income Statement (Preliminary) 0 0 2. Name the five pairs of balance sheet and income statement accounts that require adjustment and indicate the amount of adjustment for each pair. Balance Sheet Account Related Income Statement Account Amount Adj. (1) (2) (3) (4) (5) 2. Name the five pairs of balance sheet and income statement accounts that require adjustment and indicate the amount of adjustment for each pair. Balance Sheet Account Related Income Statement Account Amount Adj. (1) (2) (3) (4) (5) 1 Record the adjusting entry for supplies. 2 Record the adjusting entry for rent. Record the adjusting entry for utilities expense. 4 Record the adjusting entry for salaries and wages. Record the adjusting entry for income tax. 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? Complete this question by entering your answers in the tabs below. Req 4A Req 4B Prepare the adjusted net income that the company should report for the year ended December 31, 2018. VAL'S HAIR EMPORIUM Income Statement Dog AR Complete this question by entering your answers in the tabs below. Req 4A Req 4B By what dollar amount did the adjustments in requirement (3) cause net income to increase or decrease? Net income by
