P2-5B The Wilson Theater Ltd., owned by Tegan Wilson

P2-5B

The Wilson Theater Ltd., owned by Tegan Wilson, will begin operations in March.

The Wilson will be unique in that it will show only triple features of sequential theme movies. As of March 1, the ledger of Wilson showed :

No. 101 Cash $7,000

140 Land $22,000

145 Building (concession stand, projection room, ticket booth, and screen) $10,000

157 Equipment $8,000

201 Accounts Payable $7,000

311 Share Capital-Ordinary $40,000.

 

In addition to the accounts identified above, the chart of accounts includes 

No. 112 Accounts Receivable

400 Service Revenue

429 Rent Revenue

610 Advertising Expense

729 Rent Expense

726 Salaries and Wages Expense

 

 

During the month of March, the following events and transactions occured.

Mar. 2, Rented three Indiana Jones movies to be shown for the first 3 weeks of March. The film rental was $3,500; $1,000 was paid in cash and $2,500 will be paid on March 10.

Journal :

Dr. Rent Expense $3,500

Cr. Cash $1,000

Cr. Accounts Payable $2,500

(Rented films for cash and on account)

 

Mar. 3, Ordered the Lord of the Rings movies to be shown the last 10 days of March. It will cost $240 per night.

Journal :

No Entry

 

Mar. 9, Received $4,000 cash from admissions.

Journal :

Dr. Cash $4,000

Cr. Service Revenue $4,000

(Received cash for services performed)

 

Mar. 10,  Paid balance due to Indiana Jones movie rental and $1,600 on March 1 accounts payable.

Journal :

Dr. Accounts payable $4,100

Cr. Cash $4,100

(Paid creditors on account) 

$4,100 is from $2,500 + $1,600

 

Mar. 11, Wilson Theater contracted with M. Brewer to operate the concession stand. Brewer is to pay 15% of gross concession receipts (payable monthly) for the right to operate the concession stand.

Journal :

No Entry

 

Mar. 12, Paid advertising expenses $450.

Journal :

Dr. Advertising Expense $450

Cr. Cash $450

( Paid advertising expense)

Mar. 20, Received $4,400 cash from customers for admissions.

Journal :

Dr. Cash $4,400

Cr. Service Revenue $4,400

(Received cash from services performed)

Mar. 20, Received the Lod of Rings movies and paid the rental fee of $2,400.

Journal :

Dr. Rent Expense $2,400

Cr. Cash $2,400

(Paid film rental)

Mar. 31, Paid salaries of $2,500.

Journal :

Dr. Salaries and Wages Expense $2,500

Cr. Cash $2,500

(Paid Salaries)

Mar. 31, Received statement from M. Brewer showing gross receipts from concessions of $3,000 and the balance due to Wilson Theater of $450 ($3,000 x 15%) for March. Brewer paid one-half the balance due and will remit the remainder on April 5.

Journal :

Dr. Cash $225

Dr. Accounts Receivable $225

Cr. Rent Revenue (15% x $3,000) $450

(Received cash and balance on account for concession revenue)

Mar. 31, Received $9,000 cash from customers for admissions.

Journal :

Dr. Cash $9,000

Cr. Service Revenue $9,000

(Received cash from services performed)

Thank you.