Question

uchas otce suples agreed to a local ball by the Oh of the following tod s for services performed during the month and gave them un yhe 16th of the following month to pay Received cash on account from clients for services rendered to them in past monts Paid employees solares and wages carred during the month pod newspaper for company ads appanng during the month ved months and electric bil from the correny, payments duerytime with the first ten days of the following month Computed amount of taxes due based on the income of the period amount will be paid in the following month Problem 3-9 Transaction Analysis and Journal Entries Recorded LO3. 4. 5 Directly in T Accounts (Appendix) Four brothers organized Beverly Entertainment Enterprises on October 1. The following trans stions occurred during the first month of operations: October 1: Received contributions of $10,000 from each of the four principal owners of the Reccede new business in exchange for shares of stock. October 2: Purchased the Ace 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 Ace 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 Sold ich 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. Required 1. Prepare a table to summarize the preceding transactions as they affect the accounting cqua. tion. Ignore depreciation expense and interest expense. Use the format in Exhibit 3-1. Iden- tify 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. LO4. Problem 3-10 Trial Balance and Financial Statements (Appendix) Refer to the table for Beverly Entertainment Enterprises in part (1) of Problem 3-9. (Continued)

Answer 1

Cash Assets Accounts Receivable Stockholder's Equity Capital Stock + + + Land + Building Liabilities Accounts Payable + Concession Supplies + Notes Payable Retained Earnings 40000 112500 40000 -12500 27500 -2500 25000 35000 35000 112500 40000 90000 90000 5000 95000 35000 0 2500 2500 3700 6200 112500 42 Particulai 43 Date 44 45 1-Oct 46 2-Oct 47 Balance 48 3-Oct 49 Balance 50 10-Oct 51 Balance 52 13-Oct 53 Balance 54 17-Oct 55 Balance 56 23-Oct 57 Balance 58 24-Oct 59 Balance 40000 3700 3700 35000 95000 112500 40000 25000 4200 29200 0 4200 3700 35000 95000 6200 112500 40000 4200 1500 5700 3700 35000 95000 6200 112500 40000 29200 750 29950 4800 34750 1500 1500 -750 750 3700 35000 95000 6200 112500 40000 5700 4800 10500 750 3700 35000 95000 6200 112500 40000

750 3700 35000 95000 6200 112500 40000 750 3700 35000 95000 6200 112500 40000 60 26-Oct 61 Balance 62 27-Oct 63 Balance 64 30-Oct 65 Balance 66 31-Oct 67 Balance 68 69 2) -3000 31750 -500 31250 -2400 28850 4300 33150 -3000 7500 -500 7000 -2400 4600 4300 8900 750 3700 35000 95000 6200 112500 40000 750 3700 35000 95000 6200 112500 40000 70 71 Accounts Receivable 17-Oct 1500 Concession Supplies 12-Oct 3700 750 23-Oct Land 2-Oct 35000 1-Oct 13-Oct 23-Oct 24-Oct 31-Oct Cash 40000 2-Oct 4200 3-Oct 750 26-Oct 4800 27-Oct 4300 30-Oct 33150 12500 2500 3000 500 2400 75 750 3700 35000 Accounts Payable Capital Stock Notes Payable 2-Oct 112500 40000 1-Oct 2-Oct 3-Oct Building 90000 5000 95000 2500 3-Oct 3700 12-Oct 6200 112500 40000

Rental Revenue 17-Oct 85 Utilities expense 27-Oct 500 1500 86 87 Ticket Sales Revenue 13-Oct 1800 24-Oct 2000 31-Oct 1800 5600 Concession Sales Revenue 2400 13-Oct 2800 24-Oct 2500 31-Oct 7700 1500 500 89 90 91 92 93 94 95 Salaries & Wages expense 2400 Dividend 26-Oct 3000 30-Oct 2400 3000