Val's Hair Emporium is a hair salon. Its unadjusted trial balance as of December 31, 2017, follows, along with information about selected accounts Debit Credit Further Information Account Name As reported on December 31 bank statement. Based on count, only $3,200 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 received $450 of utility services through December 31 for which it has not yet been billed. Stylists have not yet been paid $150 for their work on December 31. The company has paid last year's income taxes but not this year's $3,800 4,300 6,000 Cash Supplies Prepaid Rent Accounts Payable $ 1,500 estimates that Val the 15. company has 0 Wages Payable Income Tax Payable taxes. Contributed Capital Retained Earnings Hair Styling Revenue 2,000 900 This amount was contributed to the company 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 $2,000 per month. This is the cost of supplies used through November 30. The company has an average tax rate of 30 percent. 75,800 29,100 12,200 20,000 4,800 Wages Expense Utilities Expense Rent Expense Supplies Expense Income Tax Expense 0 $80,200 Totals $80,200 Required: 1. Calculate the (preliminary) unadjusted net income for the year ended December 31, 2017. VAL'S HAIR EMPORIUM Unadjusted Income Statement For the Year Ended December 31, 2017 $ Hairstyling revenue 75,800 |Expenses: Wages expense 29,100 Utilities expense 12,200 Rent expense 20,000 Supplies expense 4,800 Total expenses 66,100 9,700 Net income $ 2. Name the five pairs of balance sheet and income statement accounts that require adjustment. Balance Sheet Account Related Income Statement Account Supplies Supplies expense Rent expense Prepaid rent Accounts payable Utilities expense Wages expense Wages expense Income taxes payable Income tax expense 3. Calculate the desired balances for each account listed in the unadjusted trial balance. VAL'S HAIR EMPORIUM Adjusted Trial Balance At December 31, 2017 Debit Account Titles Credit Totals O 4. Prepare the adjusting journal entries that are required at December 31, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 Record the supplies based on supplies count. Note: Enter debits before credits. Credit Transaction General Journal Debit Supplies expense Supplies Record entry Clear entry View general journal 4. Prepare the adjusting journal entries that are required at December 31, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet > 2 5 4 Record the rent expense. Note: Enter debits before credits. Transaction General Journal Debit Credit b. View general journal Record entry Clear entry 4. Prepare the adjusting journal entries that are required at December 31, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet > 1 2 3 4 5 Record the wage expense. Note: Enter debits before credits. General Journal Debit Credit Transaction . Clear entry Record entry View general journal 4. Prepare the adjusting journal entries that are required at December 31, 2017. (lf no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 3 4 5 Record the amount of income tax Note: Enter debits before credits General Journal Transaction Debit Credit d. Record entry Clear entry View general journal 4. Prepare the adjusting journal entries that are required at December 31, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 3 4 5 Record the utilities expense. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 5-a. Calculate the adjusted net income that the company should report for the year ended December 31, 2017. VAL'S HAIR EMPORIUM Income Statement For the Year Ended December 31, 2017 Expenses: Total expenses 5-b. By how much did the adjustments in requirement (4) cause net income to increase or decrease? Net income