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 $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; $1,600 was paid in cash and $1,400 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 $160 per night.
9 Received $4,400 cash from admissions.
10 Paid balance due on Indiana Jones movies rental and $2,200 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 $800.
20 Received $5,500 cash from customers for admissions.
20 Received the Lord of the Rings movies and paid the rental fee of $1,600.
31 Paid salaries of $2,900.
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 $9,700 cash from customers for admissions.

Required:
a. Journalize the March transactions.
b. Post the March journal entries to the ledger.
c. Enter the beginning balances in the ledger.

Answer 1

Answer:

Mar. 2 Rented the three Indiana Jones movies to be shown for the first 3 weeks of March. The film rental was $3,000; $1,600 was paid in cash and $1,400 will be paid on March 10.

Dr Movie rental expense 3,000

    Cr Cash 1,600

    Cr Accounts payable 1,400

3 Ordered the Lord of the Rings movies to be shown the last 10 days of March. It will cost $160 per night.

No journal entry required

9 Received $4,400 cash from admissions.

Dr Cash 4,400

    Cr Service revenue 4,400

10 Paid balance due on Indiana Jones movies rental and $2,200 on March 1 accounts payable.

Dr Accounts payable 3,600

    Cr cash 3,600

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.

No journal entry required

12 Paid advertising expenses $800.

Dr Advertising expense 800

    Cr Cash 800

20 Received $5,500 cash from customers for admissions.

Dr Cash 5,500

    Cr Service revenue 5,500

20 Received the Lord of the Rings movies and paid the rental fee of $1,600.

Dr Movie rental expense 1,600

    Cr Cash 1,600

31 Paid salaries of $2,900.

Dr Wages expense 2,900

    Cr Cash 2,900

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.

Dr Cash 375

Dr Accounts receivable 375

    Cr Concessions revenue 750

31 Received $9,700 cash from customers for admissions.

Dr Cash 9,700

    Cr Service revenue 9,700

Since there is not enough room here, I prepared a general ledger in an excel spreadsheet and attached it.

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