Question

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

Answer 1

Unadjusted income Statement (Preliminary)
Revenue from operations	82500
	Sub total	82500
Expenses
Salary and wages expense	29500
Utilities Expense		12600
Rent Expense		24000
Supplies Expense		5200
	Sub total	71300
Net profit (Unadjusted)	11200