Problem 2-5A (Part Level Submission) The Palace Theater opened on April 1. All f

Question

Problem 2-5A (Part Level Submission) The Palace Theater opened on April 1. All facilities were completed on March 31. At this time, the ledger showed No. 101 Cash $7,390, No. 140 Land $10,610, No. 145 Buildings (concession stand, projection room, ticket booth, and screen) $6,610, No. 157 Equipment $7,390, No. 201 Accounts Payable $3,390, No. 275 Mortgage Payable $8,610, and No. 311 Common Stock $20,000. During April, the following events and transactions occurred. Apr. 2 Paid film rental of $1,520 on first movie. 3 Ordered two additional films at $1,710 each. 9 Received $2,490 cash from admissions. 10 Made $2,370 payment on mortgage and $1,150 for accounts payable due. 11 Palace Theater contracted with Dever Company to operate the concession stand. Dever is to pay 18% of gross concession receipts (payable monthly) for the rental of the concession stand. 12 Paid advertising expenses $260. 20 Received one of the films ordered on April 3 and was billed $1,710. The film will be shown in April. 25 Received $6,600 cash from admissions. 29 Paid salaries $1,700. 30 Received statement from Dever showing gross concession receipts of $2,000 and the balance due to The Palace Theater of $360 ($2,000 × 18%) for April. Dever paid one-half of the balance due and will remit the remainder on May 5. 30 Prepaid $890 rental on special film to be run in May. 1. Enter the beginning balances in the ledger as of April 1. 2. Journalize the April transactions. Palace records admission revenue as service revenue, rental of the concession stand as rent revenue, and film rental expense as rent expense 3. Post the April journal entries to the ledger 4. Prepare a trial balance on April 30, 2017.

Explanation / Answer

Assets Liability Owner Equity

Cash $7390 Accounts Payable $3390 Common Stock $20000
Land $10,610 Mortage Payable $8610
Buildings $6610
Equipment $7390

Assets=Liability+owner Equity

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