P3-8A Big Sky Drive-In Theater Inc. was recently formed. It began operations in
ID: 2610725 • Letter: P
Question
P3-8A Big Sky Drive-In Theater Inc. was recently formed. It began operations in April Jou 2007. On April 1, the ledger of Big Sky showed: Cash $31,000; Land $52,000; Buildings ane (concession stand, projection room, ticket booth, and screen) $64,000; Equipment (SO $35,000; Accounts Payable $22,000; and Common Stock $160,000. During the month of April the following events and transactions occurred. Rented movies to be shown for the first two weeks of April. The film rental was $15,000; $3,000 was paid in cash and $12,000 will be paid or April 13 Ordered movies to be shown the last two weeks of April at a cost of $7,000 per week. Received $11,400 cash from admissions. Hired R. Daggett to operate the concession stand. Daggett agrees to pay Big Sky 20% of gross receipts, payable monthly. Paid balance due on movie rentals and $7,400 on April 1 accounts payable Received the movies ordered April 2 and paid rental fee of $14,000. Paid advertising expenses $600. Received $9,800 cash from customers for admissions. Paid salaries of $5,200. Received statement from R. Daggett showing gross receipts from con- cessions of $10,400 and the balance due to Big Sky of $2,080 for April. Daggett paid half the balance due and will remit the remainder on May 8 Received $23,000 cash from customers for admissions. Apr. 1 2 8 10 13 14 15 18 30 30 30 In addition to the accounts identified above, the chart of accounts includes: Accounts Receivable, Admission Revenue, Concession Revenue, Advertising Expense, Film Rental Expense, and Salaries Expense. nstructions ) Using T accounts, enter the beginning balances to the ledger (b) Journalize the April transactions, including explanations. c) Post the April journal entries to the ledger (d) Prepare a trial balance on April 30, 2007.Explanation / Answer
(a) & (c) T-accounts:
(b) Journal entries:
(d)
Cash Land Beg. Bal. 31000 Beg. Bal. 52000 Apr. 8 11400 3000 Apr. 1 Apr. 18 9800 19400 Apr. 13 Apr. 30 1040 14000 Apr. 14 Apr. 30 23000 600 Apr. 15 5200 Apr. 30 End. Bal. 34040 End. Bal. 52000 Buildings Equipment Beg. Bal. 64000 Beg. Bal. 35000 End. Bal. 64000 End. Bal. 35000 Accounts Payable Common Stock Beg. Bal. 22000 Beg. Bal. 160000 Apr. 13 19400 12000 Apr. 1 End. Bal. 14600 End. Bal. 160000 Accounts Receivable Admission Revenue Apr. 30 1040 11400 Apr. 8 9800 Apr. 18 23000 Apr. 30 End. Bal. 1040 End. Bal. 44200 Concession Revenue Advertising Expense 2080 Apr. 30 Apr. 15 600 End. Bal. 2080 End. Bal. 600 Film Rental Expense Salaries Expense Apr. 1 15000 Apr. 30 5200 Apr. 14 14000 End. Bal. 29000 End. Bal. 5200Related Questions
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