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 Ibbys 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 ExpenseSalon 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:

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

CHART OF ACCOUNTS

Aunt Ibbys

General Ledger

ASSETS
101	Cash
122	Accounts Receivable
141	Styling Supplies
145	Prepaid Insurance
181	Salon Equipment
181.1	Accumulated Depreciation-Salon Equipment

LIABILITIES
202	Accounts Payable
219	Wages Payable

EQUITY
311	Elizabeth Soltis, Capital
312	Elizabeth Soltis, Drawing
313	Income Summary

REVENUE
401	Styling Fees

EXPENSES
511	Wages Expense
512	Advertising Expense
521	Rent Expense
523	Styling Supplies Expense
525	Phone Expense
533	Utilities Expense
535	Insurance Expense
538	Gas and Oil Expense
541	Depreciation Expense-Salon equipment
549	Miscellaneous Expense