Question

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 $3,050, Land $23,000, Buildings (concession stand, projection room, ticket booth, and screen) $12,000, Equipment $12,000, Accounts Payable $6,300, and Owner’s Capital $43,750. 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 $3,200; $1,500 was paid in cash and $1,700 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 $200 per night. 9 Received $4,100 cash from admissions. 10 Paid balance due on Indiana Jones movies rental and $2,100 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 $900. 20 Received $5,500 cash from customers for admissions. 20 Received the Lord of the Rings movies and paid the rental fee of $2,000. 31 Paid salaries of $3,100. 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 $9,000 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.)

Answer 1

JOURNAL ENTRIES

Mar 2

rent expense account dr                               6400

              to cash account                                                           4700

              to accounts payable account                                       1700

mar 3

no entry - will make a entry when any transaction takes place

mar 9

cash account dr                                          4100

        to service revenue account                                 4100

      

march 10

accounts payable account dr (1700+2100)                 3800

                   to cash                                                                      3800

march 11

no entry required because only contract has been done , no transactions have taken place

mar 12

advertising expenses account dr                  900

                           to cash account                                  900

mar 20

cash account dr                                       5500

         to service revenue account                            5500

march 20

rent expenses account dr                 2000

                          to cash account                     2000

march 31

salaries account dr                                   3100

                    to cash                                                      3100

march 31

cash account dr                            375

accounts receivable account dr       375

                   to rent revenue account           750

march 31

cash account dr                              9000          

                 to service revenue account                    9000

LEDGER ACCOUNTS

         
                                                       LAND

DATE	PARTICULARS	AMOUNT	DATE	PARTICULARS	AMOUNT
	opening balance	23000
			mar 31	closing balance	23000

                                    BUIDING

DATE	PARTICULARS	AMOUNT	DATE	PARTICULARS	AMOUNT
	Opening balance	12000
			mar 31	closing balance	12000

                                                          EQUIPMEMT

DATE	PARTICULARS	AMOUNT	DATE	PARTICULARS	AMOUNT
	Opening balance	12000
			mar 31	closing balance	12000

                                                         

                                             CAPITAL ACCOUNT

DATE	PARTICULARS	AMOUNT	DATE	PARTICULARS	AMOUNT
				Opening balance	43750
MAR 31	closing balance	43750

RENT EXPENSE

DATE	PARTICULARS	AMOUNT	DATE	PARTICULARS	AMOUNT
MAR 2	cash account	4700
mar 2	accounts payable	1700
mar 20	cash account	2000
			mar 31	closing balance	8400

                                                       

      ACCOUNTS PAYABLE

CASH

                                                   SERVICE REVENUE

ADVERTISING EXPENSES

SALARIES

ACCOUNTS RECEIVABLES

                                                          RENT REVENUE