Problems: Set A

2 Hired M. Brewer to operate the concession stand. Brewer agreed to pay Vista Theatre 18% of gross concession receipts, on the last day of each month, for the right to operate the concession stand.

3 Ordered three Shrek movies, to be shown the last 10 days of June. The film rental will cost $900 per night.

9 Received $16,300 cash from customers for admissions. 10 Paid the balance due on the Batman rental. 10 Paid the accounts payable owing at the end of May. 11 Paid advertising expenses, $950. 20 Received $16,600 cash from admissions. 21 Received the Shrek movies and paid one half of the $9,000 ($900 x 10 nights)

rental fee. The balance is to be paid on July 1. 29 Paid salaries of $4,200. 30 Received statement from Brewer showing gross receipts from concessions of

$8,500 and the balance due to Vista Theatre of $1,530 ($8,500 x 18%) for March. Brewer paid one half the balance due and will pay the rest on July 5.

30 Received $18,400 cash from admissions. 30 Made a $1,725 mortgage payment. Of this amount, $1,250 is a principal pay-

ment, and $475 is interest on the mortgage. In addition to the accounts identified above, Vista Theatre's ledger includes the following: Accounts Receivable; Admission Revenue; Concession Revenue; Advertising Expense; Film Rental Expense; Interest Expense; and Salaries Expense.

Instructions

(a) Journalize the June transactions. (b) Enter the beginning balances in the ledger as at June 1. Use the standard form of account. (c) Post the June journal entries to the ledger. (d) Prepare a trial balance at the end of June.

Taki11g It Further A friend of yours is considering buying Vista Theatre from the current owner. Using the information in the trial balance, comment on whether or not this may be a sound company for your friend to purchase.

CHAPTER 2 97

P2-7A Collegiate Laundry has a December 31 year end. The company's trial balance on Journalize transactions, post, November 30, 2011, is as follows: and prepare trial balance.

(SO 3, 4, 5) AP

Cash Accounts receivable Supplies Laundry equipment Accounts payable Unearned revenue J. Cochrane, capital J. Cochrane, drawings Laundry revenue Insurance expense Rent expense Salaries expense Utilities expense

COLLEGIATE LAUNDRY Trial Balance

November 30, 2011 Debit

$ 2,800 6,800 1,100

21,000

33,000

4,015 9,350

11,525 6 875

$96,465

$ 5,765 1,300

19,500

69,900

$96,465