The Star-Lite Theater Inc. was recently formed. It began operations in March 2010. The Star-Lite is unique in that it will show only triple features of sequential theme movies. On March 1, the ledger of The Star-Lite showed: Cash $16,000; Land $38,000; Buildings (concession stand, projection room, ticket booth, and screen) $22,000; Equipment $16,000; Accounts Payable $12,000; and Common Stock $80,000. During the month of March the following events and transactions occurred.
Mar. 2 Rented the three Star Wars movies (Star Wars®, The Empire Strikes Back, and The Return of the Jedi) to be shown for the first three weeks of March. The film rental was $10,000; $2,000 was paid in cash and $8,000 will be paid on March 10.
Mar. 3 Ordered the first three Star Trek movies to be shown the last 10 days of March. It will cost $400 per night.
Mar. 9 Received $9,200 cash from admissions.
Mar. 10 Paid balance due on Star Wars movies rental and $2,600 on March 1 accounts payable.
Mar. 11 Hired J. Carne to operate concession stand. Carne agrees to pay The Star-Lite Theater 15% of gross receipts, payable monthly.
Mar. 12 Paid advertising expenses $900.
Mar. 20 Received $7,100 cash from customers for admissions.
Mar. 20 Received the Star Trek movies and paid rental fee of $4,000.
Mar. 31 Paid salaries of $3,800.
Mar. 31 Received statement from J. Carne showing gross receipts from concessions of $10,000 and the balance due to The Star-Lite of $1,500 for March. Carne paid half the balance due and will remit the remainder on April 5.
Mar. 31 Received $20,000 cash from customers for admissions
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.
Instructions
(a) Using T accounts, enter the beginning balances to the ledger.
(b) Journalize the March transactions, including explanations.
(c) Post the March journal entries to the ledger.
(d) Prepare a trial balance on March 31, 2010.