CALCULATOR PRINTER VERSION BACK NEXT Problem 2-05A a-d (Video) The Starr Theater

Question

CALCULATOR PRINTER VERSION BACK NEXT Problem 2-05A a-d (Video) The Starr Theater, owned by Meg Vargo, will begin operations in March The Starr will be unique in that it will show only triple features of sequential theme movies. As of March 1, the ledger of Starr showed: Cash $3,050, Land $23,000, Buildings (concession stand, projection room, ticket booth, and screen) $12,000, Equipment $12,000, Accounts Payable $7,200, and Owner's Capital $42,850. During the month of March, the following events and transactions occurred Mar 2 Rented the three Indiana Jones movies to be shown for the first 3 weeks of March. The film rental was $3,500; $1,400 was paid in cash and $2,100 will be paid on March 10. 3 Ordered the Lord of the Rings movies to be shown the last 10 days of March. It will cost $150 per night 9Received $4,400 cash from admissions 0 Paid balance due on Indiana Jones movies rental and $1,700 on March 1 accounts payable 11 Starr Theater contracted with Adam Ladd to operate the concession stand. Ladd is to pay 15% of gross concession receipts, payable monthly, for the rental of the concession stand 12 Paid advertising expenses $900 20 Received $5,500 cash from customers for admissions 20 Received the Lord of the Rings movies and paid the rental fee of $1,500 31 Paid salaries of $2,600 31 Received statement from Adam Ladd showing gross receipts from concessions of $5,000 and the balance due to Starr Theater of $750 ($5,000 × 15%) for March. Ladd paid one-half the balance due and will remit the remainder on April 5. 31 Received $9,000 cash from customers for admissions

Explanation / Answer

Cash No. 101 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 3050 Accounts Receivable No. 112 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 0 Land No. 140 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 23000 Buildings No. 145 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 12000 Equipment No. 157 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 12000 Accounts Payable No. 201 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 7200 Owner's Capital No. 301 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 42850 Service Revenue No. 400 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 0 Rent Revenue No. 429 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 0 Advertising Expense No. 610 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 0 Salaries and Wages Expense No. 726 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 0 Rent Expense No. 729 Date Explanation Ref Debit Credit Balance Mar. 1 Balance ? 0 Date Account Titles and Explanations Debit Credit Mar. 2 Rent expense 3500 Cash 1400 Accounts payable 2100 Mar. 3 No Entry 0 No Entry 0 Mar. 9 Cash 4400 Service revenue 4400 Mar. 10 Accounts payable 3800 Cash 3800 Mar. 11 No Entry 0 No Entry 0 Mar. 12 Advertising expense 900 Cash 900 Mar. 20 Cash 5500 Service revenue 5500 (Received admissions) Mar. 20 Rent expense 1500 Cash 1500 (Paid movie rental) Mar. 31 Salaries and wages expense 2600 Cash 2600 (Paid salaries) Mar. 31 Cash ($750 x 1/2) 375 Accounts receivable 375 Rent revenue 750 (Paid concessions) Mar. 31 Cash 9000 Service revenue 9000 (Received admissions) STARR THEATER Trial Balance March 31 Debit Credit Cash 12125 Accounts receivable 375 Land 23000 Buildings 12000 Equipment 12000 Accounts payable 5500 Owner's capital 42850 Service revenue 18900 Rent revenue 750 Advertising expense 900 Salaries and wages expense 2600 Rent expense 5000 Totals $ 68000 68000

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