P3 8A 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. 3 Ordered the first three Star Trek movies to be shown the last 10 days of March. It will cost $400 per night. 9 Received $9,200 cash from admissions. 10 Paid balance due on Star Wars movies rental and $2,600 on March 1 accounts payable. 11 Hired J. Carne to operate the concession stand. Carne agrees to pay The Star Lite Theater 15% of gross receipts, payable monthly. 12 Paid advertising expenses $900. 20 Received $7,100 cash from customers for admissions. 20 Received the Star Trek movies and paid rental fee of $4,000. 31 Paid salaries of $3,800. 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. 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. Hint: Journalize transactions, post, and prepare a trial balance. (SO 3, 5, 6, 7, 8) 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. Cash $ 31,750 Tot. trial balance $127,200 P3 9A The bookkeeper for Sandy McClain’s dance studio made the following errors in journalizing and posting.
1. A credit to Supplies of $600 was omitted.
2. A debit posting of $300 to Accounts Payable was inadvertently debited to Accounts Receivable.
3. A purchase of supplies on account of $450 was debited to Supplies for $540 and credited to Accounts Payable for $540.
4. A credit posting of $350 to Wages Payable was posted twice.
5. A debit posting to Wages Payable for $250 and a credit posting to Cash for $250 were made twice.
6. A debit posting for $1,200 of Dividends was inadvertently posted to Travel Expense instead.
7. A credit to Service Revenue for $450 was inadvertently posted as a debit to Service Revenue.
8. A credit to Accounts Receivable of $250 was credited to Accounts Payable. Hint: Analyze errors and their effects on the trial balance. (SO 8) Instructions For each error, indicate (a) whether the trial balance will balance; (b) the amount of the difference if the trial balance will not balance; and (c) the trial balance column that will have the larger total. Consider each error separately. Use the following form, in which error 1 is given as an example. (a) (b) (c) Error In Balance Difference Larger Column 1. No $600 Debit