lizabeth Soltis owns and operates Aunt Ibby's Styling Salon. A year-end work sheet is provided below. Use this information to complete this exercise. Aunt Ibby’s Styling Salon Worksheet For Year Ended December 31, 20-- 1 TRIAL BALANCE TRIAL BALANCE ADJUSTMENTS ADJUSTMENTS ADJUSTED TRIAL BALANCE ADJUSTED TRIAL BALANCE INCOME STATEMENT INCOME STATEMENT BALANCE SHEET BALANCE SHEET 2 ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT 3 Cash 940.00 940.00 940.00 4 Styling Supplies 1,500.00 (a) 1,450.00 50.00 50.00 5 Prepaid Insurance 800.00 (b) 650.00 150.00 150.00 6 Salon Equipment 4,500.00 4,500.00 4,500.00 7 Accumulated Depreciation-Salon Equipment (d) 900.00 900.00 900.00 8 Accounts Payable 225.00 225.00 225.00 9 Wages Payable (c) 40.00 40.00 40.00 10 Elizabeth Soltis, Capital 2,765.00 2,765.00 2,765.00 11 Elizabeth Soltis, Drawing 12,000.00 12,000.00 12,000.00 12 Styling Fees 32,000.00 32,000.00 32,000.00 13 Wages Expense 8,000.00 (c) 40.00 8,040.00 8,040.00 14 Rent Expense 6,000.00 6,000.00 6,000.00 15 Styling Supplies Expense (a) 1,450.00 1,450.00 1,450.00 16 Phone Expense 450.00 450.00 450.00 17 Utilities Expense 800.00 800.00 800.00 18 Insurance Expense (b) 650.00 650.00 650.00 19 Depreciation Expense—Salon Equipment (d) 900.00 900.00 900.00 20 $34,990.00 $34,990.00 $3,040.00 $3,040.00 $35,930.00 $35,930.00 18,290.00 32,000.00 17,640.00 3,930.00 21 Net Income 13,710.00 13,710.00 22 $32,000.00 $32,000.00 $17,640.00 $17,640.00 Required: 1. Prepare adjusting entries and closing entries. 2. Prepare an income statement. 3. Prepare the statement of owner's equity. Soltis made no additional investments during the yea
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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Aunt Ibby’s Styling Salon
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Worksheet
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For Year Ended December 31, 20--
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1
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TRIAL BALANCE
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ADJUSTMENTS
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ADJUSTMENTS
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ADJUSTED TRIAL BALANCE
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ADJUSTED TRIAL BALANCE
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INCOME STATEMENT
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INCOME STATEMENT
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BALANCE SHEET
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2
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ACCOUNT TITLE
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DEBIT
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CREDIT
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DEBIT
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CREDIT
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DEBIT
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CREDIT
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DEBIT
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CREDIT
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DEBIT
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CREDIT
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3
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Cash
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940.00
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940.00
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940.00
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4
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Styling Supplies
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1,500.00
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(a) 1,450.00
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50.00
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50.00
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5
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Prepaid Insurance
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800.00
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(b) 650.00
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150.00
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150.00
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6
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Salon Equipment
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4,500.00
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4,500.00
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4,500.00
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7
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(d) 900.00
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900.00
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900.00
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8
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Accounts Payable
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225.00
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225.00
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225.00
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9
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Wages Payable
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(c) 40.00
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40.00
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40.00
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10
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Elizabeth Soltis, Capital
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2,765.00
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2,765.00
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2,765.00
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11
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Elizabeth Soltis, Drawing
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12,000.00
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12,000.00
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12,000.00
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12
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Styling Fees
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32,000.00
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32,000.00
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32,000.00
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13
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Wages Expense
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8,000.00
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(c) 40.00
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8,040.00
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8,040.00
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14
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Rent Expense
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6,000.00
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6,000.00
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6,000.00
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15
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Styling Supplies Expense
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(a) 1,450.00
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1,450.00
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1,450.00
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16
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Phone Expense
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450.00
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450.00
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450.00
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17
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Utilities Expense
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800.00
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800.00
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800.00
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18
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Insurance Expense
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(b) 650.00
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650.00
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650.00
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19
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Depreciation Expense—Salon Equipment
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(d) 900.00
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900.00
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900.00
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20
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$34,990.00
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$34,990.00
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$3,040.00
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$3,040.00
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$35,930.00
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$35,930.00
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18,290.00
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32,000.00
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17,640.00
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3,930.00
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21
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Net Income
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13,710.00
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13,710.00
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22
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$32,000.00
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$32,000.00
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$17,640.00
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$17,640.00
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| 1. | Prepare |
| 2. | Prepare an income statement. |
| 3. | Prepare the statement of owner's equity. Soltis made no additional investments during the year. |
| 4. | Prepare the balance sheet. |
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