Palace Theater Balance, accounting homework help

Problem 2-5A

The Palace Theater opened on April 1. All facilities were completed on March 31. At this time, the ledger showed No. 101 Cash $6,000, No. 140 Land $12,000, No. 145 Buildings (concession stand, projection room, ticket booth, and screen) $8,000, No. 157 Equipment $6,000, No. 201 Accounts Payable $2,000, No. 275 Mortgage Payable $10,000, and No. 311 Common Stock $20,000. During April, the following events and transactions occurred.

Apr. 2 Paid film rental of $800 on first movie.
3 Ordered two additional films at $950 each.
9 Received $1,800 cash from admissions.
10 Made $2,000 payment on mortgage and $1,000 for accounts payable due.
11 Palace Theater contracted with Dever Company to operate the concession stand. Dever is to pay 18% of gross concession receipts (payable monthly) for the rental of the concession stand.
12 Paid advertising expenses $320.
20 Received one of the films ordered on April 3 and was billed $950. The film will be shown in April.
25 Received $5,200 cash from admissions.
29 Paid salaries $1,600.
30 Received statement from Dever showing gross concession receipts of $1,000 and the balance due to The Palace Theater of $180 ($1,000 X 18%) for April. Dever paid one-half of the balance due and will remit the remainder on May 5.
30 Prepaid $1,000 rental on special film to be run in May.

In addition to the accounts identified above, the chart of accounts shows No. 112 Accounts Receivable, No. 136 Prepaid Rent, No. 400 Service Revenue, No. 429 Rent Revenue, No. 610 Advertising Expense, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Hi there! Click one of our representatives below and we will get back to you as soon as possible.

Chat with us on WhatsApp