The Star Theatre, Inc. is unique as it shows only triple features of sequential theme movies. As at February 29, 2012, the Star’s general ledger showed Cash $15,000; Land $85,000; Buildings (concession stand, projection room, tick- et booth, and screen) $77,000; Equipment $20,000; $12,000; Mortgage Payable $118,000; Common Shares $40,000; and Retained Earnings $27,000. During the month of March, the following events and transactions occurred:
Mar. 2 Received three Harry Potter movies to be shown during the first three weeks of March. The film rental was $27,000. Of that amount, $10,000 was paid in cash and the remainder will be paid on March 10.
2 Hired M. Brewer to operate concession stand. Brewer agrees to pay Star Theatre 15% of gross receipts, payable on the last day of each month, for the right to operate the concession stand.
5 Ordered three Shrek movies, to be shown the last 10 days of March. The film rental cost is $300 per night.
9 Received $16,300 from customers for admissions.
12 Paid balance due on the Harry Potter movie rentals.
13 Paid the owing at the end of February.
19 Paid advertising expenses, $950.
20 Received $16,600 from customers for admissions.
23 Received the Shrek movies and paid rental fee of $3,000 ($300 × 10 nights).
25 Received $18,400 from customers for admissions.
27 Paid salaries of $4,200.
30 Received statement from M. Brewer, showing gross concession receipts of $8,600, and the balance due to Star Theatre of $1,290 for March. Brewer paid half of the balance due and will remit the remainder on April 5.
30 Paid $1,250 of mortgage principal and $750 of interest on the mortgage
Instructions
(a) Using T accounts, enter the beginning balances in the ledger as at February 29.
(b) Journalize the March transactions.
(c) Post the March journal entries to the ledger.
(d) Prepare a trial balance at March 31, 2012.
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