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The Sequel theater Inc. was recently formed

The Sequel theater Inc. was recently formed. It began operations in March 2014. The Sequel is unique in that it will show only triple features of sequential theme movies. On March 1, the ledger of The Sequel 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 vents and transactions occurred.
Mar. 2- Rented the three Star Wars movies 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.
3- Ordered the first three Star Trek movies to be shown the last 10 days of March. It will cost $500 per night.
9- Received $9,900 cash from admissions
10- Paid a balance due on Star Wars movies’ rental and $2,900 on March 1 accounts payable.
11- The sequel Theater contracted with J. Russo to operate the concession stand. Russo agrees to pay The Sequel 15% of gross receipts, payable monthly, for the rental of the concession stand.
12- Paid advertising expenses $500
20- Received $8,300 cash from customers for admission
20- Received the Star Trek movies and paid rental fee of $5,000
31- Paid salaries of $3,800
31- Received statement from J. Russo showing gross receipts from concessions of $10,000 and the balance due to The Sequel of $1,500 ($10,000 x .15) for March. Russo paid half the balance due and will remit the remainder on April 5.
31- Received $20,000 cash from customers for admissions.
In addition to the accounts identified above, the chart of accounts includes Accounts Receivable, Service Revenue, Rent Revenue, Advertising Expense, Rent Expense, and Salaries and Wages Expense.
(a) Using T-accounts, enter the beginning balances to the ledger.
(b) Journalize the March transactions, including explanations. The Sequel records admission revenue as service revenue, concession revenue as sales revenue, and film rental expense as rental expense.
(c) Post the March journal entries to the ledger
(d) Prepare a trial balance on March 31, 2014.

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Category: Sample Questions