Practice question

The following transactions were completed by Kikoti Outdoor Theatre during October 2020.

Oct 3 Kikoti, the proprietor, deposited Sh. 3,000,000 cash in a bank account in the name of the business

4 Purchased the Valley Drive-In Theatre for Sh.5,000,000, allocated as follows:

equipment, Sh. 2,000,000; buildings Sh.1,300,000; land, Sh.1,700,000. Paid Sh.1,500,000 in cash and gave a mortgage note for the remainder.

5 Paid premiums for property and casualty insurance policies, Sh.143,000

6 Paid for October billboard and newspaper advertising Sh.42,500

8 Purchased supplies, Sh.29,000 and equipment, Sh.130,000, on account.

9 Cash received from admissions for the week, Sh.220,000.

11 Paid miscellaneous expense, Sh.14,500.

15 Paid semi-monthly wages, Sh.180,000

16 Cash received from admission for the week, Sh.248,000.

17 Rented out a refreshment stand at a monthly rental of Sh.30,000 a month, payable in advance. Received cash of Sh.105,000 as advance payment for the second half of the month of October and rental deposit for three months.

20 Returned portion of equipment purchased on October 8 to the supplier, receiving full credit for its cost, Sh.22,500

22 Paid cash to creditors Sh. 123,000

23 Received cash from admission for the week, Sh.261,000

24 Purchased supplies for cash, Sh.3,700

25 Paid for advertising leaflets for October, Sh.5,100

28 Recorded invoice of Sh. 217,500 for rental of film for October. Payment is due on November 5

29 Paid electricity and water bills, Sh.30,900

30 Paid semi-monthly wages, Sh.210,000

Instructions:

Using the following account titles and numbers:Cash, 11; Accounts Receivable, 12;Prepaid Insurance, 13; Supplies, 14; Equipment, 17; Buildings, 18; Land, 19; Accounts Payable, 21; Mortgage Note Payable, 24; Rental Deposit Payable, 27; Capital, 31; Admissions Income, 41; Concessionaire Rental Income, 42; Wages Expenses, 51; Film Rental Expense, 52; Advertising Expenses, 53; Electricity & Water Expenses, 54; Miscellaneous Expenses, 59.

1. Record the transactions in a two-column journal.
2. Post the journal to the ledger
3. Prepare a trial balance as of October 31.