Question

October 3: Problem 3-9 Transaction Analysis and Journal Entries Recorded LO3.4 Directly in T Accounts (Appendix) Four brothers organized Beverly Entertainment Enterprises on October 1. The following trans- actions occurred during the first month of operations: October 1: Received contributions of $10,000 from each of the four principal owners of the 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. 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 tickets for 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.

Answer 1

Beverly Entertainment Enterprises Journal Enteries Date Particulars Oct-01 Cash a/c To Common Stock (Capital Invested) Dr. Debit in $ Credit in $ 40000 40000 Dr. Dr. 35000 90000 Oct-02 Land a/c Building a/c To Cash To Note Payable (Theatre Purchased) 12500 112500 Trial Balance For the period ending Oct 31 Particulars Cash Accounts Receivable Supplies Accessories Land Building Accounts Payable Note Payable Common Stock Dividend Sales Rent Revenue Utilities Expense Wages Expense Totals Debit in $ Credit in $ 33150 750 3700 5000 35000 90000 6200 112500 40000 3000 5600 9200 500 2400 173500 173500 5000 Oct-03 Accessories a/c Dr. To Cash To Accounts Payable (Seats purchased) 2500 2500 Oct-12 3700 Supplies a/c Dr. To Accounts Payable (Supplies on account) 3700 Dr. Oct-13 Cash a/c 4200 To Sales To Rent Revenue (Sale of ticktes and concession stand rent) 1800 2400 Statement of Income For the period ending Oct 31 Sales Rent Revenue Total Revenue Less: Utilities Expense Wages Expense Net Income 5600 9200 14800 500 2400 1500 Oct-17 Accounts Receivable a/c Dr. To Rent Revenue (Theatre rent) 2900 11900 1500 750 Oct-23 Cash a/c Dr. To Accounts Receivable (Cash from debtors) Statement of Retained earnings For the period ending Oct 31 Net Income Less:Dividends 750 11900 -3000 8900 Oct-24 Cash a/c Dr. 4800 To Sales To Rent Revenue (Sale of ticktes and concession stand rent) 2000 2800 Oct-26 Dr. 3000 Dividend a/c To Cash (Dividend paid) 3000 Dr. 500 Oct-27 Utilities Expense a/c To Cash (Expense paid) 500 Dr. 2400 Oct-30 Wages Expense a/c To Cash (Wages paid) 2400 Oct-31 Cash a/c Dr. 4300 To Sales To Rent Revenue (Sale of ticktes and concession stand rent) 1800 2500

Amounts in $ Amounts in $ Balance sheet As at Oct 31 Assets Current Assets Cash Accounts Receivable Supplies Accessories 6200 Amounts in $ Amounts in $ Liabilities Current Liabilities 33150 Accounts Payable 750 3700 Non Current Liabilities 5000 42600 Note Payable 112500 Non Current Assets Land Building Total assets 35000 90000 Shareholders Equity Common Stock 125000 Retained earnings 167600 Total Liabilities & Equity 40000 8900 48900 167600