Val's Hair Emporium is a hair salon. Its unadjusted trial balance as of December 31, 2017, follows, along with information about selected accounts. Credit Account Name Cash Supplies Prepaid Rent Accounts Payable Debit $ 3,800 4,300 6,000 $ 1,500 0 Wages Payable Income Tax Payable Further Information 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 15. Val estimates that the company has 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 taxes. 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. 2,000 900 75,800 Contributed Capital Retained Earnings Hair Styling Revenue Wages Expense Utilities Expense Rent Expense Supplies Expense Income Tax Expense 29,100 12,200 20,000 4,800 0 Totals $80,200 $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 $ Expenses: 75,800 Wages expense Utilities expense 29,100 12,200 20,000 4,800 Rent expense Supplies expense Total expenses Net income 66,100 9,700 $ 2. Name the five pairs of balance sheet and income statement accounts that require adjustment. Balance Sheet Account Supplies Prepaid rent Accounts payable Wages expense Income taxes payable Related Income Statement Account Supplies expense Rent expense Utilities expense Wages expense 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 $ $ 0 Journal entry worksheet Record the supplies based on supplies count. Note: Enter debits before credits. Transaction Debit Credit a. General Journal Supplies expense Supplies Record entry Clear entry View general journal Journal entry worksheet Record the wage expense. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet Record the amount of income tax. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet
