Chapter 4: EOC HomewXAssignment C Brokeback Towing O ezto.mheducation.com/hm.tpx

Question

Chapter 4: EOC HomewXAssignment C Brokeback Towing O ezto.mheducation.com/hm.tpx connect ACCOUNTING Sections 1&2 Sprin apter 4. EOC Homework Questions 2 -5 (of 8) Val's Hair Emporium operates a halr salon. Its unadjusted triai balance as of December 31. 2015 follows along with information about selected accounts eblt Credit Further Information Account Names Cash Supplies Prepaid Rent Accounts Payable $ 3,100 3,600 3.900 As reported on December 31 bank statement. Based on count, only $950 of supplies still exist. This amount was pald November 1 for rent through the end of January. S 1,150 This represents the total amount of bills recelved for supplies and utilities through December 15. Val estimates that the company has recelved $380 of utlity services through December 31 for which it has not yet been billed Salarles and Wages Payable Income Tax Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Utilities Expense Rent Expense Supplies Expense Income Tax Expense 0 0 1,300 700 64,450 Stylists have not yet been pald $100 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 company in prior years. Thls is the balance reported at the end of last year. Customers pay cash when they recelve services 5 28,400 11,500 13,000 4,100 This is the cost of stylist wages through December 30 This is the cost of utilities through December 15. This year's rent was $1,300 per month. This is the cost of supplies used through November 30. The company has an average tax rate of 25% Totals $67,600 67,600 0.50 points Required: 1. Prepare the (preliminary) unadjusted net income statement for the year ended December 31, 2015

Explanation / Answer

VAL'S HAIR EMPORIUM Balance sheet acount Related income statement a/c Amount Income statement (Unadjusted) income tax payable income tax expense $2,565 for the year ended December 31, 2015 prepaid rent Rent expense $2,600 Service revenue $64,450 accounts payable utilities expense $380 Less Expenses: Salaries & wages payable Salaires & wages expense $100 Salaries & wages expense (28400+100) $28,500 Supplies Supplies expense $950 utilities expense (11500+380) $11,880 Rent expense (13000+1300*2) $15,600 supplies expense (4100+950) $5,050 Total operating expense $61,030 income before tax $3,420 less income tax payable (@ 25%) $855 Net Income $2,565

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