The Sequel Theater Inc. was recently formed. It began operations in March 2014.

Question

The Sequel Theater Inc. was recently formed. It began operations in March 2014. The Sequel is unique in that it will show only triple features of sequential theme movies. On March 1, the ledger of The Sequel showed Cash $20,850; Land $42,850; Buildings (concession stand, projection room, ticket booth, and screen) $22,000; Equipment $16,000; Accounts Payable $16,850; and Common Stock $84,850. During the month of March, the following events and transactions occurred.

Received $20,700 cash from customers for admissions.

Which Digits should I put on Accounts Payable and Cash?

Mar. 2 Rented the three Star Wars movies (Star Wars®, The Empire Strikes Back, and The Return of the Jedi) to be shown for the first three weeks of March. The film rental was $9,443; $2,000 was paid in cash and $7,443 will be paid on March 10. 3 Ordered the first three Star Trek movies to be shown the last 10 days of March. It will cost $500 per night. 9 Received $9,423 cash from admissions. 10 Paid balance due on Star Wars movies' rental and $2,900 on March 1 accounts payable. 11 The Sequel Theater contracted with J. Russo to operate the concession stand. Russo agrees to pay The Sequel 15% of gross receipts, payable monthly, for the rental of the concession stand. 12 Paid advertising expenses $470. 20 Received $8,320 cash from customers for admissions. 20 Received the Star Trek movies and paid rental fee of $4,400. 31 Paid salaries of $3,890. 31 Received statement from J. Russo showing gross receipts from concessions of $14,000 and the balance due to The Sequel of $2,100 ($14,000 × .15) for March. Russo paid half the balance due and will remit the remainder on April 5. 31

Received $20,700 cash from customers for admissions.

Which Digits should I put on Accounts Payable and Cash?

Explanation / Answer

Consider Cash and Accounts payable Ledger A/cs as below:

                                 

Cash A/c Date Particulars Debit Credit Mar-01 Opening balance 20,850 Mar-02 Star war Movies Film Rental 2,000 Mar-09 Admissions A/c 9,423 Mar-10 Accounts Payable 7,443 Mar-10 Accounts Payable 2,900 Mar-12 Advertising A/c 470 Mar-20 Admissions A/c 8,320 Mar-20 Star Trek rental fee 4,400 Mar-31 Salaries 3,890 Mar-31 Russo A/c 1,050 Mar-31 Admissions A/c 20,700 60,343 21,103 Mar-31 Closing Balance 39,240 Accounts Payable A/c Date Particulars Debit Credit Mar-01 Opening Balance 16,850 Mar-02 Star war Movies Film Rental 7,443 Mar-10 Cash A/c 7,443 Mar-10 Cash A/c 2,900 Mar-20 Star Trek Movies rental 600 Totals 10,343 24,893 Mar-31 Closing Balance 14,550

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.