Four brothers organized Beverly Entertainment Enterprises on October 1, 2010. The following transactions occurred during the first month of operations: October 1: Received contributions of $10,000 from each of the four principal owners of the new business in exchange for
Four brothers organized Beverly Entertainment Enterprises on October 1, 2010. The following transactions occurred during the first month of operations:
October 1: Received contributions of $10,000 from each of the four principal owners of the new business in exchange for shares of stock.
October 2: Purchased the Arcada Theater for $125,000. The seller agreed to accept a down payment of $12,500 and a seven-year promissory note for the balance. The Arcada property consists of land valued at $35,000 and a building valued at $90,000.
October 3: Purchased new seats for the theater at a cost of $5,000, paying $2,500 down and agreeing to pay the remainder in 60 days.
October 12: Purchased candy, popcorn, cups, and napkins for $3,700 on an open account. The company has 30 days to pay for the concession supplies.
October 13: Sold tickets for the opening-night movie for cash of $1,800 and took in $2,400 at the concession stand.
October 17: Rented out the theater to a local community group for $1,500. The community group is to pay one-half of the bill within five working days and has 30 days to pay the remainder.
October 23: Received 50% of the amount billed to the community group.
October 24: Sold movie tickets for cash of $2,000 and took in $2,800 at the concession stand.
October 26: The four brothers, acting on behalf of Beverly Entertainment, paid a dividend of $750 on the shares of stock owned by each of them, or $3,000 in total.
October 27: Paid $500 for utilities.
October 30: Paid wages and salaries of $2,400 total to the ushers, projectionist, concession stand workers, and maintenance crew.
October 31: Sold movie tickets for cash of $1,800 and took in $2,500 at the concession stand.
1. Prepare a table to summarize the preceding transactions as they affect the accounting equation. Use the format in Exhibit 3-1. Identify each transaction with a date.
2. Record each transaction directly in T accounts using the dates preceding the transactions to identify them in the accounts. Each account involved in the problem needs a separate T account.
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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