Question

Val’s Hair Emporium operates a hair salon. Its unadjusted trial balance as of December 31, 2018, follows, along with information about selected accounts.

Account Names	Debit				Credit				Further Information
Cash	$	4,000							As reported on December 31 bank statement.
Supplies		4,500							Based on count, only $1,400 of supplies still exist.
Prepaid Rent		6,600							This amount was paid November 1 for rent through the end of January.
Accounts Payable					$	1,600			This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $470 of utility services through December 31 for which it has not yet been billed.
Salaries and Wages Payable						0			Stylists have not yet been paid $100 for their work on December 31.
Income Tax Payable						0			The company has paid last year’s income taxes but not this year’s taxes.
Common Stock						2,200			This amount was contributed for common stock in prior years.
Retained Earnings						700			This is the balance reported at the end of last year.
Service Revenue						79,300			Customers pay cash when they receive services.
Salaries and Wages Expense		29,300							This is the cost of stylist wages through December 30.
Utilities Expense		12,400							This is the cost of utilities through December 15.
Rent Expense		22,000							This year’s rent was $2,200 per month.
Supplies Expense		5,000							This is the cost of supplies used through November 30.
Income Tax Expense		0							The company has an average tax rate of 30%.
Totals	$	83,800			$	83,800

Journal entry worksheet

Note: Enter debits before credits.

	Transaction General Journal Debit Credit a Supplies Expense       Supplies

Transaction General Journal Debit Credit b

Transaction General Journal Debit Credit c

Transaction General Journal Debit Credit d

Transaction General Journal Debit Credit e

Answer 1

Transaction	General Journal	Debit	Credit
a	Supplies Expense	3100		=4500-1400
	Supplies		3100
b	Rent expense	4400		=6600*2/3
	Prepaid rent		4400
c	Utilities Expense	470
	Accounts Payable		470
d	Salaries and Wages Expense	100
	Salaries and Wages Payable		100
e	Income Tax Expense	759		=2530*30%
	Income Tax Payable		759
	Workings:
	Service Revenue	79300
	Less: Expenses
	Salaries and Wages Expense	29400		=29300+100
	Utilities Expense	12870		=12400+470
	Rent Expense	26400		=2200*12
	Supplies Expense	8100		=5000+3100
	Total Expenses	76770
	Income before tax	2530