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 Nanes Cash Supplies Prepaid Rent Accounts Payable Salaries 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 Totals Debit $ 3,300 3,800 4,500 28,600 11,700 15,000 4,300 8 $ 71,200 Credit $ 1,250 1,500 900 67,558 $ 71,200 Further Information As reported on December 31 bank statement. Based on count, only $1,858 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 $480 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 31. 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 $1,50 per month. This is the cost of supplies used through November 30. The company has an average tax rate of 30%. a. Calculate the adjusted net income that the company should report for the year ended December 31, 2021. . By what dollar amount did the adjustments in requirement (3) cause net income to increase or decrease?
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 Nanes Cash Supplies Prepaid Rent Accounts Payable Salaries 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 Totals Debit $ 3,300 3,800 4,500 28,600 11,700 15,000 4,300 8 $ 71,200 Credit $ 1,250 1,500 900 67,558 $ 71,200 Further Information As reported on December 31 bank statement. Based on count, only $1,858 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 $480 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 31. 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 $1,50 per month. This is the cost of supplies used through November 30. The company has an average tax rate of 30%. a. Calculate the adjusted net income that the company should report for the year ended December 31, 2021. . By what dollar amount did the adjustments in requirement (3) cause net income to increase or decrease?
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter14: Activities Required In Completing A Quality Audit
Section: Chapter Questions
Problem 65RSCQ
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Question
![Required Information
[The following information applies to the questions displayed below.]
Val's Hair Emporium operates a hair salon. Its unadjusted trial balance as of December 31, 2021, follows, along with
information about selected accounts.
Account Names
Cash
Supplies
Prepaid Rent
Accounts Payable
Salaries and Wages Payable
Income Tax Payable
Common Stock
Retained Earnings
Service Revenue
Salaries and Wages Expense
Utilities Expense
Rent Expense
Supplies Expense
Income Tax Expense
Totals
Req 4A
Revenues
Service Revenue
Req 40
Total Expenses
Expenses
VAL'S HAIR EMPORIUM
Income Statement
For the Year Ended December 31, 2021
✓
✔$ 67,550✔
Salaries and Wages Expense
Utilities Expense
Rent Expense
Supplies Expense
Debit
$ 3,300
3,800
4,500
Total Expenses
Net Income
28,600
11,780
15,000
8
333333
$71,200
33
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?
Complete this question by entering your answers in the tabs below.
67,550
Credit
Calculate the adjusted net income that the company should report for the year ended December 31, 2021.
28,600 x
11,700x
15,000 x
4,300 x
59,600
$ 7,950
This amount was paid November 1 for rent
through the end of January.
$1,250 This represents the total amount of bills
received for supplies and utilities through
December 15. Val estimates that the company
has received $480 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 31.
The company has paid last year's income taxes
but not this year's taxes.
1,500 This amount was contributed for common stock
8
Req 4A
Further Information
As reported on December 31 bank statement.
Based on count, only $1,858 of supplies still
exist.
988
$ 71,200
in prior years.
This is the balance reported at the end of
last year.
67,558 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.
Answer is not complete.
This year's rent was $1,500 per month.
This is the cost of supplies used through
November 30.
The company has an average tax rate of 30%.
Req 4B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1befd8b-fea9-4d58-a4db-57124c8cf11b%2Fd74867ef-9ce4-44e9-931b-20f100895d91%2Ftkvb58m_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
Val's Hair Emporium operates a hair salon. Its unadjusted trial balance as of December 31, 2021, follows, along with
information about selected accounts.
Account Names
Cash
Supplies
Prepaid Rent
Accounts Payable
Salaries and Wages Payable
Income Tax Payable
Common Stock
Retained Earnings
Service Revenue
Salaries and Wages Expense
Utilities Expense
Rent Expense
Supplies Expense
Income Tax Expense
Totals
Req 4A
Revenues
Service Revenue
Req 40
Total Expenses
Expenses
VAL'S HAIR EMPORIUM
Income Statement
For the Year Ended December 31, 2021
✓
✔$ 67,550✔
Salaries and Wages Expense
Utilities Expense
Rent Expense
Supplies Expense
Debit
$ 3,300
3,800
4,500
Total Expenses
Net Income
28,600
11,780
15,000
8
333333
$71,200
33
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?
Complete this question by entering your answers in the tabs below.
67,550
Credit
Calculate the adjusted net income that the company should report for the year ended December 31, 2021.
28,600 x
11,700x
15,000 x
4,300 x
59,600
$ 7,950
This amount was paid November 1 for rent
through the end of January.
$1,250 This represents the total amount of bills
received for supplies and utilities through
December 15. Val estimates that the company
has received $480 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 31.
The company has paid last year's income taxes
but not this year's taxes.
1,500 This amount was contributed for common stock
8
Req 4A
Further Information
As reported on December 31 bank statement.
Based on count, only $1,858 of supplies still
exist.
988
$ 71,200
in prior years.
This is the balance reported at the end of
last year.
67,558 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.
Answer is not complete.
This year's rent was $1,500 per month.
This is the cost of supplies used through
November 30.
The company has an average tax rate of 30%.
Req 4B >
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