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Practice C4-5

Frontier Park was started by C.J. Mendez on April 1. Throughout the month, various expenses were incurred and revenue was generated from admission fees. Transactions included investing cash, purchasing land, paying salaries, receiving admission fees, selling coupon books, and paying expenses. The journal entries for these transactions need to be recorded.

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87 views3 pages

Practice C4-5

Frontier Park was started by C.J. Mendez on April 1. Throughout the month, various expenses were incurred and revenue was generated from admission fees. Transactions included investing cash, purchasing land, paying salaries, receiving admission fees, selling coupon books, and paying expenses. The journal entries for these transactions need to be recorded.

Uploaded by

Huyền Trang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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P1 Frontier Park was started on April 1 by C. J. Mendez.

The following
selected events and transactions occurred during April.
Apr. 1 Mendez invested $40,000 cash in the business.
4 Purchased land costing $30,000 for cash.
8 Incurred advertising expense of $1,800 on account.
11 Paid salaries to employees $1,500.
12 Hired park manager at a salary of $4,000 per month, effective May 1.
13 Paid $1,500 cash for a one-year insurance policy.
17 Withdrew $1,000 cash for personal use.
20 Received $5,700 in cash for admission fees.
25 Sold 100 coupon books for $25 each. Each book contains 10 coupons
that entitle the holder to one admission to the park.
30 Received $8,900 in cash admission fees.
30 Paid $900 on balance owed for advertising incurred on April 8.
Mendez uses the following accounts: Cash, Prepaid Insurance, Land,
Accounts Payable, Unearned Admission Revenue, C. J. Mendez,
Capital; C. J. Mendez, Drawing; Admission Revenue, Advertising
Expense, and Salaries Expense.
Instructions
Journalize the April transactions.
P2 Jane Kent is a licensed CPA. During the first month of operations of
her business, the
following events and transactions occurred.
May 1 Kent invested $25,000 cash.
2 Hired a secretary-receptionist at a salary of $2,000 per month.
3 Purchased $2,500 of supplies on account from Read Supply Company.
7 Paid office rent of $900 cash for the month.
11 Completed a tax assignment and billed client $2,100 for services
provided.
12 Received $3,500 advance on a management consulting engagement.
17 Received cash of $1,200 for services completed for H. Arnold Co.
31 Paid secretary-receptionist $2,000 salary for the month.
31 Paid 40% of balance due Read Supply Company.
Jane uses the following chart of accounts: Cash, Accounts Receivable,
Supplies, Accounts Payable, Unearned Revenue, Jane Kent, Capital;
Service Revenue, Salaries Expense, and Rent Expense.
Instructions
(a) Journalize the transactions.
(b) Post to the T accounts.
P3 The Lake Theater is owned by Tony Carpino. All facilities were
completed on March 31.
At this time, the ledger showed: Cash $6,000, Land $10,000, Buildings
(concession stand, projection room, ticket booth, and screen) $8,000,
Equipment $6,000, Accounts Payable $2,000, Mortgage Payable $8,000,
and Tony Carpino, Capital $20,000. During April, the following events
and transactions occurred.
Apr. 2 Paid film rental of $800 on first movie.
3 Ordered two additional films at $1,000 each.
9 Received $2,800 cash from admissions.
10 Made $2,000 payment on mortgage and $1,000 for accounts payable
due.
11 Lake Theater contracted with R. Wynns Company to operate the
concession stand. Wynns is to pay 17% of gross concession receipts
(payable monthly) for the right to operate the concession stand.
12 Paid advertising expenses $500.
20 Received one of the films ordered on April 3 and was billed $1,000.
The film will be shown in April.
25 Received $5,200 cash from admissions.
29 Paid salaries $2,000.
30 Received statement from R. Wynns showing gross concession
receipts of $1,000 and the balance due to The Lake Theater of $170
($1,000 x 17%) for April. Wynns paid one-half of the balance due and
will remit the remainder on May 5.
30 Prepaid $900 rental on special film to be run in May.
In addition to the accounts identified above, the chart of accounts shows:
Accounts Receivable, Prepaid Rentals, Admission Revenue, Concession
Revenue, Advertising Expense, Film Rental Expense, and Salaries
Expense.
Instructions
(a) Journalize the April transactions.
(b) Post the April journal entries to T accounts

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