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Calculate the adjusted net income

Calculate the adjusted net income

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Calculate the adjusted net income

--- ### Required Information **Context:** Val’s Hair Emporium operates a hair salon. Below is the unadjusted trial balance as of December 31, 2021, with additional information regarding selected accounts. **Unadjusted Trial Balance:** | **Account Names** | **Debit** | **Credit** | **Further Information** | |---------------------------------|------------|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Cash | $4,700 | | As reported on December 31 bank statement. | | Supplies | 5,200 | | Based on count, only $1,750 of supplies still exist. | | Prepaid Rent | 8,700 | | This amount was paid November 1 for rent through the end of January. | | Accounts Payable | | $1,950 | This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $540 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 $150 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 | 2,900 | | This amount was contributed for common stock in prior years. | | Retained Earnings | 900 | | This is the balance reported at the end of last year. | | Service Revenue | | 90,650 | Customers pay cash when they receive services. | | Salaries and Wages Expense | 30,000 | | This is the cost of stylist wages through December 30. | | Utilities Expense | 13,100 | | This is the cost of utilities through December 15. | | Rent Expense | 29,000 | | This year’s rent was $2,900 per month. | | Supplies Expense | 5,700 | | This is the cost of supplies used through November 30. | | Income Tax Expense | 0 |
Transcribed Image Text:--- ### Required Information **Context:** Val’s Hair Emporium operates a hair salon. Below is the unadjusted trial balance as of December 31, 2021, with additional information regarding selected accounts. **Unadjusted Trial Balance:** | **Account Names** | **Debit** | **Credit** | **Further Information** | |---------------------------------|------------|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Cash | $4,700 | | As reported on December 31 bank statement. | | Supplies | 5,200 | | Based on count, only $1,750 of supplies still exist. | | Prepaid Rent | 8,700 | | This amount was paid November 1 for rent through the end of January. | | Accounts Payable | | $1,950 | This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $540 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 $150 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 | 2,900 | | This amount was contributed for common stock in prior years. | | Retained Earnings | 900 | | This is the balance reported at the end of last year. | | Service Revenue | | 90,650 | Customers pay cash when they receive services. | | Salaries and Wages Expense | 30,000 | | This is the cost of stylist wages through December 30. | | Utilities Expense | 13,100 | | This is the cost of utilities through December 15. | | Rent Expense | 29,000 | | This year’s rent was $2,900 per month. | | Supplies Expense | 5,700 | | This is the cost of supplies used through November 30. | | Income Tax Expense | 0 |
**Educational Website Transcription:** ### Income Statement Exercise **Instructions:** **4-a.** Calculate the adjusted net income that the company should report for the year ended December 31, 2021. **4-b.** By what dollar amount did the adjustments in requirement (3) cause net income to increase or decrease? **Interactive Tabs:** - **Req 4A** - **Req 4B** **Income Statement for Val's Hair Emporium** - The table is structured to allow for input of financial figures. Each row likely represents a specific category of income or expense, essential for calculating net income. - Two key totals marked as zero are present, suggesting initial sums to be adjusted with appropriate data. **Graph/Diagram Explanation:** There is no graph or diagram present in the image. The table for input has blue headers and fields designated for entering financial data, providing a clear interface for organizing the information needed to calculate net income adjustments.
Transcribed Image Text:**Educational Website Transcription:** ### Income Statement Exercise **Instructions:** **4-a.** Calculate the adjusted net income that the company should report for the year ended December 31, 2021. **4-b.** By what dollar amount did the adjustments in requirement (3) cause net income to increase or decrease? **Interactive Tabs:** - **Req 4A** - **Req 4B** **Income Statement for Val's Hair Emporium** - The table is structured to allow for input of financial figures. Each row likely represents a specific category of income or expense, essential for calculating net income. - Two key totals marked as zero are present, suggesting initial sums to be adjusted with appropriate data. **Graph/Diagram Explanation:** There is no graph or diagram present in the image. The table for input has blue headers and fields designated for entering financial data, providing a clear interface for organizing the information needed to calculate net income adjustments.
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