15SE - Horngren'S Financial And Managerial Accounting

Question

Question :Just Right Hair Stylists has begun the preparation of its worksheet as follows:

Year-end data include the following: a. Office supplies on hand, \(300. b. Depreciation, \)700. c. Accrued interest expense, $800. Complete Just Right’s worksheet through the adjusted trial balance section. In the adjustments section, mark each adjustment by letter

Step-by-Step Solution

Answer

Worksheet are as follows:

JUST RIGHT HAIR STYLISTS
Worksheet
December 31, 2018
	Unadjusted Trial Balance	Adjustments	Adjusted Trial Balance
Account Names	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$300				$300
Office Supplies	900			$600	300
Equipment	20,600				20,600
Accumulated Depreciation—Equipment		$700		700		$1400
Accounts Payable		500				500
Interest Payable				800		800
Note Payable		2,800				2,800
Common Stock		4,200				4,200
Service Revenue		17,500				17,500
Rent Expense	3,200				3,200
Supplies Expense			600		600
Depreciation Expense—Equipment			700		700
Interest Expense	700		800		1,500
Total	$25,700	$25,700	$2,100	$2,100	$27,200	$27,200

Step-by-Step-Solution Step1: Explanation on Worksheet

As per the worksheet, in adjustment section total debits and credits equals $2,100, and in adjusted trial balance equals total debits and credits equals $27,200.

Step2: Calculation of Office Supplies Expense

Office supplies expense is calculated as follows: 

$$\begin{gathered} \mathbf{OfficeSuppliesUsed}\mathbf{=}\mathbf{OfficeSuppliesBalanceBeforeAdjustment}-\mathbf{OfficeSuppliesonHand} \\ \mathbf{=}\mathbf{\$}\mathbf{900}-\mathbf{\$}\mathbf{300} \\ \mathbf{=}\mathbf{\$}\mathbf{600} \end{gathered}$$