Val's Hair Emporium operates a hair salon. Its unadjusted trial balance as of December 31, 2018, follows, along with information about selected accounts. Debit $ 3,80e 4, 30e 6,eee Account Names Credit Further Information Cash Supplies Prepaid Rent As reported on December 31 bank statement. Based on count, only $1,30e of supplies still exist. This amount was paid November 1 for rent through the end of January. Accounts Payable $ 1, see This represents the total amount of bills received for supplies and utilities through December 15. Val estimates that the company has received $45e of utility services through Decenber 31 for which it has not yet been billed. e Stylists have not yet been paid $15e for their work on December 31. Salaries and kages Payable e The company has paid last year's income taxes but not this year's taxes. Income Tax Payable 2,ee0 This amount was contributed for common stock in prior years. 9e0 This is the balance reported at the end of last year. 75, 8e0 Customers pay cash when they receive services. Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Utilities Expense Rent Expense Supplies Expense Income Tax Expense This is the cost of stylist wages through December 30. This is the cost of utilities through December 15. This year's rent was $2,80e per month. This is the cost of supplies used through November 30. The company has an average tax rate of 3es. 29,100 12, 200 20,eee 4,800 Totals $8e, 200 $8e, 200 3. Prepare the adjusting journal entries that are required at December 31, 2018. (If no entry ls required for a transaction/event, select "No Journal Entry Required" in the first account fleld.) Answer is complete but not entirely correct. No Transaction General Journal Debit Credit Supplies Expense 3,000 Supplies 3,000 2 Rent Expense 4,000 Prepaid Rent 4.000 3 Ublities Expense 450 Accounts Payable 450 Salaries and Wages Expense 150 Salaries and Wages Payable 150 Income Tax Expense Income Tax Payable 2,010 2.010
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.
![Requlred Informatlon
[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
$ 3,800
4, 300
6,000
Cash
As reported on December 31 bank statement.
Based on count, only $1,300 of supplies still exist.
This amount was paid November 1 for rent through the end of
January.
This represents the total amount of bills received for supplies
and utilities through December 15. Val estimates that the company
has received $458 of utility services through December 31 for
which it has not yet been billed.
Stylists have not yet been paid $150 for their work on December
Supplies
Prepaid Rent
Accounts Payable
$ 1, 500
Salaries and Wages Payable
31.
Income Tax Payable
The company has paid last year's income taxes but not this year's
taxes.
This amount was contributed for common stock in prior years.
This is the balance reported at the end of last year.
Customers pay cash when they receive services.
This is the cost of stylist wages through December 30.
This is the cost of utilities through December 15.
This year's rent was $2,e00 per month.
This is the cost of supplies used through November 30.
The company has an average tax rate of 30%.
Common Stock
2,000
Retained Earnings
900
Service Revenue
75, 800
Salaries and Wages Expense
Utilities Expense
Rent Expense
Supplies Expense
Income Tax Expense
29,100
12, 200
20, 000
4,800
Totals
$80, 200
$88, 200
3. Prepare the adjusting journal entries that are required at December 31, 2018. (If no entry Is requlred for a transaction/event, select
"No Journal Entry Requlred" In the first account fleld.)
Answer is complete but not entirely correct.
No
Transaction
General Joumal
Debit
Credit
Supplies Expense
3,000
a
Supplies
3,000
b
Rent Expense
4,000 O
Prepaid Rent
4,000
3
Utilities Expense
450
Accounts Payable
450
4
Salaries and Wages Expense
150 O
Salaries and Wages Payable
150
Income Tax Expense
2,910 X
e
Income Tax Payable
2,910 X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7100c50b-ddff-47ff-95bb-897dc45c5954%2F8c636732-7641-4f05-9d5f-0b3276a35caf%2Ff4i9x6v_processed.jpeg&w=3840&q=75)
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