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Chapter 4: Q1SE (page 217)

Dalton Hair Stylists’s adjusted trial balance follows. Prepare Dalton’s income statement for the year ended December 31, 2018. DALTON HAIR STYLISTS Adjusted Trial Balance December 31, 2018 Account Title Office Supplies Cash Debit Credit Accounts Receivable Equipment Accumulated Depreciation—Equipment Accounts Payable Interest Payable Notes Payable Common Stock Dividends Service Revenue Rent Expense Supplies Expense Depreciation Expense—Equipment Interest Expense Balance \( 1,300 \) 36,150 \( 36,150 400 \) 2,200 3,100 500 1,400 16,150 13,800 3,900 850 2,200 2,300 1,500 1,800 20,900 Total.

Short Answer

Expert verified

Income statement is shown as follows:

DALTON HAIR STYLISTS

Income Statement

Year Ended December 31, 2018

Revenues

Service Revenue

$13,800

Expenses

Rent Expense

$3,900

Supplies Expense

850

Depreciation Expense—Equipment

2,200

Interest Expense

2,300

Total Expenses

9,250

Net Income

$4,550

Step by step solution

01

Explanation of net income

When the total revenues are higher than the total expenses, then it results in the net income in the period.

02

Calculation of net income

Net income is calculated as follows:

NetIncome=TotalRevenues-TotalExpenses=$13,800-$9,250=$4,550

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Most popular questions from this chapter

Benson Auto Repair has the following account balances at December 31, 2018, from its adjusted trial balance. Compute

Benson Auto Repair’s current ratio.

Cash \( 4,000 Common Stock \) 20,000

Accounts Receivable 3,200 Retained Earnings 15,700

Prepaid Rent 1,900 Dividends 2,100

Office Supplies 3,000 Service Revenue 1,600

Equipment 34,800 Depreciation Expense—Equipment 300

Accumulated Depreciation—Equipment 1,600 Salaries Expense 800

Accounts Payable 5,400 Rent Expense 500

Notes Payable (long-term) 7,000 Utilities Expense 600

Supplies Expense 100

Identify two asset categories on the classified balance sheet, and give examples of each category.

The adjusted trial balance of Rocket Real Estate Appraisal at June 30, 2018, follows: ROCKET REAL ESTATE APPRAISAL Adjusted Trial Balance June 30, 2018Account Title Office Supplies Cash Debit Credit Accounts Receivable Prepaid Insurance Building Accumulated Depreciation—Building Land Accounts Payable Interest Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Common Stock Dividends Retained Earnings Service Revenue Insurance Expense Salaries Expense Supplies Expense Interest Expense Balance \( 5,000 \) 178,100 \( 178,100 12,800 \) 25,200 71,000 8,000 1,000 2,100 37,000 25,800 5,500 1,600 1,700 18,700 5,000 33,000 48,100 4,100 32,000 600 8,000 2,900 7,100 Utilities Expense Depreciation Expense—Building Total . Requirements 1. Prepare the company’s income statement for the year ended June 30, 2018. 2. Prepare the company’s statement of retained earnings for the year ended June 30, 2018. 3. Prepare the company’s classified balance sheet in report form at June 30, 2018. 4. Journalize the closing entries. 5. Open the T-accounts using the balances from the adjusted trial balance, and post the closing entries to the T-accounts. 6. Prepare the company’s post-closing trial balance at June 30, 2018.

Refer to the data in Short Exercise S4-1. Prepare Dalton’s classified balance sheet at December 31, 2018. Assume the Notes Payable is due on December 1, 2025. Use the report form.

Winters Landscape Services accrued \(4,000 of Salaries Expense at December 31. Winters paid the next payroll at January 10 of

\)6,000. This payment included the accrued amount at December 31, plus $2,000 for the first few days of January.

23A. Record the adjusting entry to accrue Salaries Expense
See all solutions

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