Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

LI U NEW Age Theatre Ltd. during the year ended November 30, 2018, require a transaction journal entry or an adjusting journal entry, or both.

image text in transcribed
LI U NEW Age Theatre Ltd. during the year ended November 30, 2018, require a transaction journal entry or an adjusting journal entry, or both. The company adjusts its accounts annually. 1. 2. 3. 4. On June 1, 2017, the theatre purchased vehicles for $80,000 cash. The vehicles' estimated useful life is five years and the company uses straight-line depreciation The theatre has eight plays each season. This year's season starts in October 2013 and ends in May 2019 (one play per month). Season tickets sell for $320. On October 1, 400 season tickets were sold for the 2018-2019 season. The theatre credited Unearned Revenue for the full amount received on October 1 and uses a Ticket Revenue account to record revenue earned from season tickets. Supplies on hand amounted to $1,000 at the beginning of the year. On February 16, additional Supplies were purchased for cash at a cost of $2,100. At the end of the year, a physical count showed that supplies on hand amounted to $500. On June 1, 2018, the theatre borrowed $100,000 from the Bank of Montreal at an interest rate of 6%. The principal is to be repaid in one year. The interest is payable on the first day of each following month, and was last paid on November 1. The New Age Theatre rents a portion of its facilities for $400 a month to a local dance club that uses the space for rehearsals. On November 2, the dance club's treasurer made a mistake and accidentally sent a cheque for only $200 for the November rent. (Hint: Use the Unearned Revenue account to record the rent received in advance.) The dance club's treasurer promised to send a cheque in December for the balance when she returned from vacation. On December 4, the theatre received a $200 cheque for the balance owing from November The total weekly payroll is $7,000, paid every Monday for employee salaries earned during a seven-day workweek running from Sunday to Saturday. Salaries were last paid (and recorded) on Monday, November 26, and will be paid next on Monday, December 3. November 30 falls on a Friday this year, Upon reviewing its income tax calculations on November 30, the theatre noted that an additional $1,250 of income tax was owed. This additional amount was paid on December 14. 5. 6. 7

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Total Quality Safety Management And Auditing

Authors: Michael B. Weinstein

1st Edition

1566702836, 978-1566702836

More Books

Students also viewed these Accounting questions

Question

What is the optimal span of control?

Answered: 1 week ago

Question

How would you establish the value of learning this material?

Answered: 1 week ago

Question

3. Identify cultural universals in nonverbal communication.

Answered: 1 week ago