P38A Big Sky DriveIn Theater Inc was recently formed It bega

P3-8A Big Sky Drive-In Theater Inc. was recently formed. It began operations in April Jou 2007. On April 1, the ledger of Big Sky showed: Cash $31,000; Land $52,000; Buildings ane (concession stand, projection room, ticket booth, and screen) $64,000; Equipment (SO $35,000; Accounts Payable $22,000; and Common Stock $160,000. During the month of April the following events and transactions occurred. Rented movies to be shown for the first two weeks of April. The film rental was $15,000; $3,000 was paid in cash and $12,000 will be paid or April 13 Ordered movies to be shown the last two weeks of April at a cost of $7,000 per week. Received $11,400 cash from admissions. Hired R. Daggett to operate the concession stand. Daggett agrees to pay Big Sky 20% of gross receipts, payable monthly. Paid balance due on movie rentals and $7,400 on April 1 accounts payable Received the movies ordered April 2 and paid rental fee of $14,000. Paid advertising expenses $600. Received $9,800 cash from customers for admissions. Paid salaries of $5,200. Received statement from R. Daggett showing gross receipts from con- cessions of $10,400 and the balance due to Big Sky of $2,080 for April. Daggett paid half the balance due and will remit the remainder on May 8 Received $23,000 cash from customers for admissions. Apr. 1 2 8 10 13 14 15 18 30 30 30 In addition to the accounts identified above, the chart of accounts includes: Accounts Receivable, Admission Revenue, Concession Revenue, Advertising Expense, Film Rental Expense, and Salaries Expense. nstructions ) Using T accounts, enter the beginning balances to the ledger (b) Journalize the April transactions, including explanations. c) Post the April journal entries to the ledger (d) Prepare a trial balance on April 30, 2007.

Solution

(a) & (c) T-accounts:

(b) Journal entries:

(d)

Cash		Land
Beg. Bal.	31000				Beg. Bal.	52000
Apr. 8	11400	3000	Apr. 1
Apr. 18	9800	19400	Apr. 13
Apr. 30	1040	14000	Apr. 14
Apr. 30	23000	600	Apr. 15
		5200	Apr. 30
End. Bal.	34040				End. Bal.	52000
Buildings		Equipment
Beg. Bal.	64000				Beg. Bal.	35000
End. Bal.	64000				End. Bal.	35000
Accounts Payable		Common Stock
Beg. Bal.		22000			Beg. Bal.		160000
Apr. 13	19400	12000	Apr. 1
End. Bal.		14600			End. Bal.		160000
Accounts Receivable		Admission Revenue
Apr. 30	1040						11400	Apr. 8
							9800	Apr. 18
							23000	Apr. 30
End. Bal.	1040				End. Bal.		44200
Concession Revenue		Advertising Expense
		2080	Apr. 30		Apr. 15	600
End. Bal.		2080			End. Bal.	600
Film Rental Expense		Salaries Expense
Apr. 1	15000				Apr. 30	5200
Apr. 14	14000
End. Bal.	29000				End. Bal.	5200