[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, 2021, follows, along with information about selected accounts. Account Names Cash Credit Debit $ 3,500 Further Information As reported on December 31 bank statement. Supplies 4,000 Based on count, only $1,150 of supplies still exist. Prepaid Rent 5,100 This amount was paid November 1 for rent through the end of January. Accounts Payable $ 1,350 This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $420 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 $200 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 1,700 This amount was contributed for common stock in prior years. Retained Earnings 800 This is the balance reported at the end of last year. Service Revenue 70,950 Customers pay cash when they receive services. Salaries and Wages Expense This is the cost of stylist wages through December 30. Utilities Expense This is the cost of utilities through December 15. Rent Expense This year's rent was $1,700 per month. This is the cost of supplies used through November 30. Supplies Expense The company has an average tax rate of Income Tax Expense 25%. Totals 28,800 11,900 17,000 4,500 0 $74,800 $74,800
[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, 2021, follows, along with information about selected accounts. Account Names Cash Credit Debit $ 3,500 Further Information As reported on December 31 bank statement. Supplies 4,000 Based on count, only $1,150 of supplies still exist. Prepaid Rent 5,100 This amount was paid November 1 for rent through the end of January. Accounts Payable $ 1,350 This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $420 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 $200 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 1,700 This amount was contributed for common stock in prior years. Retained Earnings 800 This is the balance reported at the end of last year. Service Revenue 70,950 Customers pay cash when they receive services. Salaries and Wages Expense This is the cost of stylist wages through December 30. Utilities Expense This is the cost of utilities through December 15. Rent Expense This year's rent was $1,700 per month. This is the cost of supplies used through November 30. Supplies Expense The company has an average tax rate of Income Tax Expense 25%. Totals 28,800 11,900 17,000 4,500 0 $74,800 $74,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
1. Calculate the adjusted net income that the company should report for the year ended December 31, 2021.
2. By what dollar amount did the adjustments in requirement (3) cosmet income to increase or decrease.
Transcribed Image Text:### Educational Resource: Unadjusted Trial Balance Analysis for Val’s Hair Emporium
Val’s Hair Emporium operates a hair salon. Below is the unadjusted trial balance as of December 31, 2021, along with additional information about selected accounts.
#### Account Balances
| Account Names | Debit | Credit | Further Information |
|-------------------------------|--------|---------|-------------------------------------------------------------------|
| **Cash** | $3,500 | | As reported on the December 31 bank statement. |
| **Supplies** | $4,000 | | Based on count, only $1,150 of supplies still exist. |
| **Prepaid Rent** | $5,100 | | This amount was paid on November 1 for rent through the end of January. |
| **Accounts Payable** | | $1,350 | This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $420 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 $200 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** | | $1,700 | This amount was contributed for common stock in prior years. |
| **Retained Earnings** | | $800 | This is the balance reported at the end of last year. |
| **Service Revenue** | | $70,950 | Customers pay cash when they receive services. |
| **Salaries and Wages Expense**| $28,800| | This is the cost of stylist wages through December 30. |
| **Utilities Expense** | $11,900| | This is the cost of utilities through December 15. |
| **Rent Expense** | $17,000| | This year’s rent was $1,700 per month. |
| **Supplies Expense** | $4,500 | | This is the cost of supplies used through November 30. |
| **Income Tax Expense**
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