We Do Hair, Inc.is afull service hair salon, operatedby its majority shareholder andhair specialist,ScarlettCoif.Presented below is the November 30,2015, unadjusted trial balance ofWe Do Hair, Inc. The temporary account balances represent the results of entries recorded during the first 11 months of2015, and the balance inWe Do Hairscommon stock and retained earnings accounts have not changed since December 31,2014.Currently,15,000shares of stock are outstanding and50,000 shares have been authorized.All income tax effects are to be ignored for this project.

We Do Hair, Inc.

Unadjusted Trial Balance

November 30,2015

	REF	DEBIT	CREDIT
Cash	111	$36,667
Senior Center Receivables	112	3,400
Supplies Inventory	113	8,400
Prepaid Rent	114
Prepaid Insurance	115
Hair Equipment	131	54,836
Accumulated Depreciation, Equipment	132		$4,100
Computer and other office equipment	135	30,739
Accumulated Depreciation, Computer and other office equipment	136		12,830
Accounts Payable	211		1,500
Wages Payable	212
Interest Payable	213
Unearned Service Revenue	214		1,700
Long-Term Notes Payable	220		10,000
Common Stock ($5 par value)	311		40,000
Retained Earnings	312		22,682
Dividends Paid	313	1,500
Income Summary	314
Mens haircut revenue	411		81,160
Womens haircut revenue	412		149,700
Perm revenue	413		64,000
Senior citizen cut revenue	414		16,783
Wages Expense	511	195,000
Rent Expense	512	18,900
Insurance Expense	513
Supplies Expense	514	20,250
Utilities Expense	515	18,200
Advertising Expense	516	9,750
Maintenance Expense	517	6,280
Depreciation Expense, Hair equipment	518
Depreciation Expense, Computer and other office equipment	519
Interest Expense	520	533
Total		$404,455	$404,455

The following transactions occurred during the month of December2015:

12/1	We Do Hair, Inc. rents its salon space as part of a local mall.We Do Hair prepays its rent 12 months in advance.The annual rental payment is made on December 1 of each year and expires on December 1 of the following year.The rental payment is made on this date for the 12 months ending December 1, 2016.The payment is $19,200.
12/2	Cash revenues received for various services were: mens haircuts $3,200, womens haircuts $4,800, perms $980, and senior citizens $680.
12/4	Senior Citizens Receivable represents visits made by We Do Hair to area Senior Citizen Centers to give haircuts to residents of the senior center.After giving haircuts on a given day, We Do Hair bills the senior center for the number of haircuts given.Today haircuts at Johnson Senior Care were given totaling $2,500 and Johnson was billed accordingly.
12/4	Purchased a two year insurance policy, protecting We Do Hair from lawsuits for especially bad haircuts.The term of this policy is December 1, 2015 December 1, 2017.The two year premium is $9,600.
12/5	Purchased various haircut supplies, on account, $1,700.
12/7	Purchased an automobile for employees to use when driving to give off-site haircuts, such as to area senior citizen homes.Record as Hair Equipment.Cost of the auto is $21,000.$10,000 is paid in cash and the remainder is financed with a three-year, 8% note payable, theprinciple amount of the note being paid in full on December 1, 2018.Interest is paid annually each December 1, beginning December 1, 2016.
12/10	Received bill for and paid $6,500 for a series of radio advertisements that were aired December 1 10.
12/12	Cash revenues for mens haircuts were $8,800 and womens haircuts were $12,600.In addition, cash revenues for perms were $5,900.
12/14	Received payments from senior citizen centers, $3,400, on account.
12/17	Paid wages to employees, who are paid per haircut given.This periods biweekly wage totaled $9,270.
12/19	Paid $670 to janitorial service for cleaning the office.
12/20	Received bill for advertisements shown in local newspapers, totaling $3,900.The bill we be paid in a couple of weeks.
12/21	Purchased supplies, on account, $1,250.
12/23	Paid various accounts payable bills, $7,160.
12/24	Paid various automobile expenses for driving to senior citizen centers, and other travel related expenses, $1,175.
12/28	Performed haircuts at the Community Senior Citizen center, and billed the center, $4,600.
12/31	Cash haircuts and perms for the last half of the month were mens haircuts $4,200, womens haircuts $5,800, perms $600.
12/31	Paid more bills on account, $800.
12/31	Paid interest on the $10,000 long-term note payable, $1,000.

REQUIREMENTS

1.Prepare and post journal entries to record the December transactions listed above.

2.Post the December journal entries to the General Ledger.

3.Transfer the December 31 unadjusted balances from the General Ledger accounts to the 6 column worksheet.

4.Journalizeandpostthe adjusting entries to the General Ledger based on the following items.The adjusting journal entries should also beenteredon the 6 column worksheet.[1]

a.Unpaid wages were $10,700 as of December 31.

b.The December 31 supply inventory was $3,200.

c.The expired portion of the prepaid rentas of 12/31/15is recorded.

d.Depreciation for the year on thehairequipmentfollows: (1) on the equipment owned throughout the year $2,950, (2) the automobile purchased on December 7 has a 5 year life and no salvage value.Record one months depreciation on the auto.Total depreciation is the sum of (1) and (2).

e.Depreciation for the year on theComputer and Other Equipment was $4,300.

f.Unpaid utilities expense for December was $2,364 (credit accounts payable).

g.Unearned revenue is for68 haircuts to be given to a local Boy Scouts group.The group paid in advance for these haircuts in November.As of December 31, 56 of the haircuts have been given.

h.Prepare the adjustment to accrue interest on the note payable from December 7 (24 days).

i.The expired portion (1 month) of the liability insurance (December 4) is recorded.

5.Prepare an income statement, statement of retained earnings, and a classified balance sheet for the year-ended

December 31,2015.

6.Journalizeandpostthe closing entries.