In: Accounting
The Starr Theater, owned by Meg Vargo, will begin operations in
March. The Starr will be unique in that it will show only triple
features of sequential theme movies. As of March 1, the ledger of
Starr showed: Cash $2,950, Land $22,000, Buildings (concession
stand, projection room, ticket booth, and screen) $10,000,
Equipment $10,000, Accounts Payable $6,000, and Owner’s Capital
$38,950. During the month of March, the following events and
transactions occurred.
Mar. 2 | Rented the three Indiana Jones movies to be shown for the first 3 weeks of March. The film rental was $3,000; $1,400 was paid in cash and $1,600 will be paid on March 10. | |
3 | Ordered the Lord of the Rings movies to be shown the last 10 days of March. It will cost $150 per night. | |
9 | Received $4,000 cash from admissions. | |
10 | Paid balance due on Indiana Jones movies rental and $1,500 on March 1 accounts payable. | |
11 | Starr Theater contracted with Adam Ladd to operate the concession stand. Ladd is to pay 15% of gross concession receipts, payable monthly, for the rental of the concession stand. | |
12 | Paid advertising expenses $700. | |
20 | Received $5,000 cash from customers for admissions. | |
20 | Received the Lord of the Rings movies and paid the rental fee of $1,500. | |
31 | Paid salaries of $2,500. | |
31 | Received statement from Adam Ladd showing gross receipts from concessions of $5,000 and the balance due to Starr Theater of $750 ($5,000 × 15%) for March. Ladd paid one-half the balance due and will remit the remainder on April 5. | |
31 | Received $8,900 cash from customers for admissions. |
1.) Enter the beginning balances in the ledger.
2.) Journalize the March transactions. Starr records admission
revenue as service revenue, rental of the concession stand as rent
revenue, and film rental expense as rent
expense.(Credit account titles are automatically
indented when the amount is entered. Do not indent manually. Record
journal entries in the order presented in the problem. If no entry
is required, select "No Entry" for the account titles and enter 0
for the amounts.)
3.) Post the March journal entries to the ledger.
(Post entries in the order of journal entries presented
in the previous question.)