Reference no: EM131792377
Question 1 - The Star-lite Theater Inc. was recently formed. It began operations in March 2010. The Star-lite is unique in that it will show only triple features of sequential theme movies. On March 1, the ledger of The Star-lite showed: Cash 16,000; Land $38,000; Building (concession stand, projection room, ticket booth, and screen) $22,000; Equipment $16,00; Accounts Payable $12,00; and Common Stock $80,000. During the month of March the following events and transactions occurred:
2-Mar Rented the three Star Wars movie (Star Wars®, The Empire Strikes Back, and the renturn of the Jedi) to be shown for the first three weeks of March. The film rental was $10,000; $20,000 was paid in cash and $8,000 will be paid on March 10.
3-Mar Ordered the first three Star Trek Moviews to be shown the last 10 days of March. It will cost $400 per night.
9-Mar Receoved $9,000 cash from admissions
10-Mar Paid balance due Star Wars movie rental and $2,600 on March 1 accounts payable
11-Mar Hired J. Carne to operate the concessions stand. Carne agrees to pay the Star-lite Theather 15% of gross receipts, payables monthly.
12-Mar Paid advertising expenses $900
20-Mar Received $7,100 cash from customers for admissions
20-Mar Received $7,100 cash from customers for admissions
31-Mar Paid salaries of $3,800
31-Mar Received statement from J. Carne showing gross receipts from concessions of $10,000 and the balance due to The Star-Lite of $1,500 for March. Carne paid half the balance due and will remit the reminder on April 5.
31-Mar Received $20,000 cash from customers for admissions
In addition to the accounts identified above, the chart of accounts includes: Accounts Receivables, Admission Revenue, Concession Revenue, Advertising Expense, Film Rental Expense, and Salaries Expense.
Instructions-
a) Using T accounts, enter the beginning balances to the ledger.
b) Journalize the March transactions, including explanations
C) Post the March journal entries to the ledger
d) Prepare a trail balance on March 31, 2010.
Question 2 - Linda Blye opened Cardinal Window Washing Inc. on July 1, 2010. During July the following transactions were completed.
1-Jul Issued 11,000 shares of common stock for $11,000
1-Jul Purchased used trucks for $9,000, paying $2,000 cash and the balance on account.
3-Jul Purchased cleaning supplies for $900 on account
5-Jul Paid, $1,800 cash on 1- year insurance policy effective July 1.
12-Jul Billed customers $3,200 for cleaning services
18-Jul Paid, $1,000 cash on anoybnt owed on truck and $500 on amount owed on cleaning supplies.
20-Jul Paid $2,000 cash fro employee salaries
21-Jul Collected $1,400 cash from customers billed on July 12
25-Jul Billed customers $2,500 for cleaning services
31-Jul Paid $260 for gash and oil used in the truck during month
31-Mar Declared and paid $600 cash dividend
The chart of accounts for Cardinal Window Washing containts the following Accounts: Cash, Accounts Receivable, Cleaning Supplies, Prepaid Insurance, Equipment, Accumulated Depreciations-Equipment, Accounts Payable, Salaries Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Gash & Oil Expense, Cleaning Supplies Expenses, Depreciation Expenses, Insurance Expenses, Salaries Expense.
Instructions -
a) Journalize the July transactions
b) Post to the ledger accounts. (Use T accounts)
c) Prepare a trail balance at July 31
d) Journalie the following adjustments
1) Services provided but unbilled and uncollected at July 31 were $1,700
2) Depreciation on equipment for the month was $250
3) One-twelfth of the insurance expired
4) An inventory count shows $360 of cleaning supplies on hand at July 31
5) Accrued but unpaid employee salaries were $400
e) Post adjusting entries to the T accounts
f) Prepare an adjusted trail balance
g) Prepare the income statement and a retained earning statement for July and a classified balance sheet at July 31.
h) Journalize and post closing entries and complete the closing process.
i) Prepare a post-closing trail balance at July 31.