On March 31, 2012, the Lake Theatre, Inc.’s general ledger showed Cash $6,000; Land $100,000; Buildings (con- cession stand, projection room, ticket booth, and screen) $80,000; Equipment $25,000; $5,000; Mortgage Payable $125,000; Common Shares $50,000; and Retained Earnings $31,000. During the month of April, the following events and transactions occurred:
Apr. 2 Paid film rental fee of $800 on first movie.
3 Paid advertising expenses, $620.
3 Hired Thoms Limited to operate concession stand. Thoms agrees to pay the Lake Theatre 20% of gross concession receipts, payable monthly, for the right to operate the concession stand.
6 Ordered two additional films at $750 each.
11 Received $1,950 from customers for admissions.
16 Paid $2,000 on mortgage principal. Also paid $500 in interest on the mortgage.
17 Paid $2,800 of the accounts payable.
20 Received one of the films ordered on April 6 and was billed $750. The film will be shown in April.
25 Received $5,300 from customers for admissions.
26 Paid salaries, $1,900.
27 Prepaid $700 rental fee on special film to be run in May.
30 Received statement from Thoms showing gross concession receipts of $2,600 and the balance due to the Lake Theatre of $520 ($2,600 × 20%) for April. Thoms paid half of the balance due and will remit the remainder on May 5.
Instructions
(a) Using T accounts, enter the beginning balances in the ledger as at March 31.
(b) Journalize the April transactions.
(c) Post the April journal entries to the ledger.
(d) Prepare a trial balance at April 30, 2012.
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