Question

Elizabeth 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:

.	prepare adjusting entries and closing entries.
	Prepare an income statement.
	Prepare the statement of owner's equity. Soltis made no additional investments during the year.
	Prepare the balance sheet.

Answer 1

The answer has been presented in the supporting sheets. All the parts has been solved with detailed explanation and format. For detailed answers refer to the supporting sheets.

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