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.

Account Names	Debit				Credit				Further Information
Cash	$	2,800							As reported on December 31 bank statement.
Supplies		3,300							Based on count, only $800 of supplies still exist.
Prepaid Rent		3,000							This amount was paid November 1 for rent through the end of January.
Accounts Payable					$	1,000			This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $350 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						1,000			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						59,500			Customers pay cash when they receive services.
Salaries and Wages Expense		28,100							This is the cost of stylist wages through December 30.
Utilities Expense		11,200							This is the cost of utilities through December 15.
Rent Expense		10,000							This year’s rent was $1,000 per month.
Supplies Expense		3,800							This is the cost of supplies used through November 30.
Income Tax Expense		0							The company has an average tax rate of 30%.
Totals	$	62,200			$	62,200

PA4-4 Part 1

Required:

1. Prepare the (preliminary) unadjusted net income statement for the year ended December 31, 2018.

I have

Revunues

Service Revunue $59,500

Total Revnues 59,500

Expenses

Salaries and wages Expense 28,100

Utilities Expense 11,200

Rent Expense 10,000

Supplies Expense 3800

Income Tax Expense 0

Total Expenses 53,100

Net Income 6400

Now part 2

Name the five pairs of balance sheet and income statement accounts that require adjustment and indicate the amount of adjustment for each pair.

1 Supplies - Supplies Expense Amount $2500

2 Prepaid Rent - Rent Expense $2000

3 Accounts Payable Utilities Expense $350

4 Salaries and wages payable- Salaries and wages expense $100

5 Income tax payable - income tax expense $0

part 3

PA4-4 Part 3

3. Prepare the adjusting journal entries that are required at December 31, 2018. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.

Not sure on this part or how to get income tax payable, any help would be greatly appreciated

PA4-4 Part 4

1. 4-a. Prepare the adjusted net income that the company should report for the year ended December 31, 2018.
2. 4-b. By what dollar amount did the adjustments in requirement (3) cause net income to increase or decrease?

and this is the end of the question I need to order each one in steps 1,2,3,4 I appreciate the help a lot it will help me learn how to solve this thanks!

Answer 1

Ques 1
Hairstyling revenue		59,500
less:
Wages Expense	28,100
Utilities Expense	11,200
Rent Expense	10,000
Supplies Expense	3,800
total expenses		53,100
net income		6,400
Ques 2
Balance sheet account	Related income statement account
Supplies	Supplies expense
Prepaid rent	Rent expense
Accounts payable	Utilities expense
Wages payable	Wages expense
Income taxes payable	Income tax expense
Ques 3
	General Journal	Debit	Credit
a.	Supplies expense	2,500
	Supplies		2,500
	3300-800
b.	Rent expense	2,000
	Prepaid rent		2,000
	3000/3*2
c.	Utilities expense	350
	Accounts payable		350
d.	Wages expense	100
	Wages payable		100
e.	Income tax expense	435
	Income tax payable		435
Note to calculate income tax expense
Hairstyling revenue		59,500
less:
Wages Expense	28,200	28100+100
Utilities Expense	11,550	11200+350
Rent Expense	12,000	10000+2000
Supplies Expense	6,300	3800+2500
total expenses		58,050
net income		1,450
income tax expense=	1450*0.3	435
Ques 4
Hairstyling revenue		59,500
less:
Wages Expense	28,200
Utilities Expense	11,550
Rent Expense	12,000
Supplies Expense	6,300
Income tax expense	435
total expenses		58,485
net income		1,015
Ques 5
Unadjusted income	6,400
Adjusted income	1,015
Difference due to adjustments	5,385