Question

The accounts listed below appeared in the December 31 trial balance of the Vaughn Theater. Debit Credit Equipment $194,000 Accumulated Depreciation-Equipment $64,600 Notes Payable 162,000 Admissions Revenue 387,300 Advertising Expense 15,220 Salaries and Wages Expense 59,200 Interest Expense 2,520

From the account balances listed above and the information given below, prepare the annual adjusting entries necessary on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,250.) (1) The equipment has an estimated life of 16 years and a salvage value of $22,528 at the end of that time. (Use straight-line method.) (2) The note payable is a 90-day note given to the bank on October 20 and bearing interest at 8%. (Use 360 days for denominator.) (3) In December, 1,830 coupon admission books were sold at $30 each and recorded as Admissions Revenue. They could be used for admission any time after January 1. (4) Advertising expense paid in advance and included in Advertising Expense $1,007. (5) Salaries and wages accrued but unpaid $4,406. No. Account Titles and Explanation Debit Credit (1) (2) (3) (4) (5) SHOW LIST OF ACCOUNTS

What amounts should be shown for each of the following on the income statement for the year? (1) Interest Expense $ (2) Admissions Revenue $ (3) Advertising Expense $ (4) Salaries and Wages Expense $

Answer 1

solution Date Account title Debit Geder Dec 31 171472 Dep expe - Cakoment [194000 – 22528] To Accumulated dep-equipment 191472 3240 Interest expense [162000 x 90 days /360 day x To Interest payable 3240 54900 Admissions Revenue [ 1830 X 30 each] To unearned revenue 54900 1007 4406 prepard Advertising To Adreantising experse 1007 Salaries and wages expense To salaries and wages 4406 payable Amount in Income estatement for the year :- 1) Interest experze = 2520 + 3240 = 5760 2) Admission revenue = 387300 7 54900 = 332400 3) Advertising expense = 15220.-- 1007 = 14213 Salaries and wages exporge - 59200 + 4406 = 63606