The Chicago Theater is owned by Rashied Davis. All facilities were completed on March 31. At this time, the ledger showed: No. 101 Cash $4,000, No. 140 Land $10,000, 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 $8,000, and No. 301 Owner?s Capital $18,000. During April, the following events and transactions occurred.
Apr. 2 Paid film rental of $1,100 on first movie.
3 Ordered two additional films at $1,000 each.
9 Received $2,800 cash from admissions.
10 Made $2,000 payment on mortgage and $1,000 for accounts payable due.
11 Chicago Theater contracted with Virginia McCaskey to operate the concession stand.
McCaskey is to pay 17% of gross concession receipts (payable monthly) for the rental of the concession stand.
12 Paid advertising expenses $500.
20 Received one of the films ordered on April 3 and was billed $1,000. The film will be shown in April.
25 Received $5,200 cash from admissions.
29 Paid salaries $2,000.
30 Received statement from Virginia McCaskey showing gross concession receipts of $1,000 and the balance due to The Chicago Theater of $170 ($1,000 3 17%) for April.
McCaskey paid one-half of the balance due and will remit the remainder on May 5.
30 Prepaid $1,200 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.
(a) Enter the beginning balances in the ledger as of April 1. Insert a check mark (?) in the reference column of the ledger for the beginning balance.
(b) Journalize the April transactions. Chicago records admission revenue as service revenue, rental of the concession stand as rent revenue, and film rental expense as rent expense.
(c) Post the April journal entries to the ledger. Assume that all entries are posted from page 1 of the journal.
(d) Prepare a trial balance on April 30, 2012.
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