Roxy Theater Inc. was recently formed. All facilities were completed on March 31.
On April 1, the ledger showed: Cash $6,300; Land $10,000; Buildings (concession stand, projection room, ticket booth, and screen) $58,000; Equipment $6,000; Accounts Payable $2,300; Mortgage Payable $38,000; and Common Stock $40,000. During April, the following events and transactions occurred.
Apr. 2 Paid film rental fee of $1,800 on frst movie.
3 Ordered two additional films at $750 each.
9 Received $5,700 cash from admissions.
10 Paid $2,000 of mortgage payable and $1,200 of accounts payable.
11 Roxy Theater contracted with M. Gavin to operate the concession stand. Gavin agrees to pay Roxy Theater 17% of gross receipts, payable monthly.
12 Paid advertising expenses $410.
20 Received one of the film ordered on April 3 and was billed $750. The film will be shown in April.
25 Received $3,000 cash from customers for admissions.
29 Paid salaries $1,900.
30 Received statement from M. Gavin showing gross receipts of $2,000 and the balance due to Roxy Theater of $340 ($2,000 3 .17) for April. Gavin paid half of the balance due and will remit the remainder on May 5.
30 Prepaid $1,200 rental fee on special film to be run in May.
In addition to the accounts identified above, the chart of accounts shows Accounts Receivable, Prepaid Rent, Service Revenue, Rent Revenue, Advertising Expense, Rent Expense, Salaries and Wages Expense.
Instructions
(a) Enter the beginning balances in the ledger T-accounts as of April 1.
(b) Journalize the April transactions, including explanations.
(c) Post the April journal entries to the ledger T-accounts.
(d) Prepare a trial balance on April 30, 2014.