The Task

Community Theatre has offered you a trial contract as their accountant. Your future as their permanent accountant depends on your timely, thorough, and accurate completion of certain tasks.

Parameter of Your Trial Contract

Complete the worksheet and financial statements for the month of January, prepare and post adjusting and closing entries, and prepare a post-closing trial balance.

Journalize the February transactions, post them to the ledger accounts, and prepare a trial balance.

Complete the work sheet, financial statements, adjusting and closing entries, and post-closing trial balance for

February.

Examine the financial results for the Community Theatre for two months and make recommendations to the

owners by way of a written report and presentation.

Materials Required

January financial information

February Source documents

Additional information for February

Appropriate work sheets, forms, and statements

Suggested Procedure

January Financial Statements

Complete an eight-column worksheet

Prepare the monthly financial statements

Set up a general ledger with the appropriate accounts and balances

Journalize and post the adjusting and closing entries

Prepare a post-closing trial balance

February Source Documents

Journalize the source documents and post to the general ledger

Prepare a trial balance

February Financial Statements a. Complete an eight-column work sheet b. Prepare the financial statements c. Journalize and post the adjusting and closing entries d. Prepare a post-closing trial balance

The Accounting Cycle Unit Project

D. Analysis

Prepare a written report to analyze current profitability, possibilities to finance expansion, and

strategies to increase future profitability

Present your report to the owners of the business

Report through Google sheets or Excel

Presentation through Google slides or PowerPoint

Self-assessment included in the slides

Evaluation

Based on a self-assessment of your completion of the task, would Community Theatre offer you a permanent contract? Justify your opinion.

Part A

January Financial Information

Community Theatre rents its premises from the Community Shopping Centre. The theatre has been open for a month and management wants to find out if the business has made a profit or a loss. Using the additional information, follow suggested procedure to complete the task.

Additional Information

The projection equipment and furniture depreciates by 20% of the original value per year and will have no residual value. Note: calculate the depreciation to the nearest dollar value.

Rent was prepaid for three months on January 1

Insurance was prepaid for three months on January 1

Office supplies on hand on January 31 were valued at $260

Part B February Source Documents

February 7

Cash register tapes from the box office for the week show transactions No. 1571 to No. 1843 for total sales of $2858. The money was deposited in the bank account. Weekly sales report for the confectionary shows a total of $225 as the theatres share of sales. The money was deposited in the bank account. Purchase invoices received: No. 3817 from Electronics Canada Ltd., $256 for final adjustments to the projector. No. 5112 from The Daily Sentinel, $750 for newspaper advertisements. Cheques issued: No. 375 to City Utility, $632 for electricity and water. No. 376 to Bell Canada, $195 for telephone and Internet charges.

14 Cash register tapes from the box office for the week show transactions No. 1844 to No. 2561 for total sales of $7534.

	Weekly sales report for the confectionary shows a total of $612 as the theatres share of sales. Purchase invoices received: No. 5528 from International Film Distributors, $1289 for rental of the film shown from February 1 to 7. No. T581 from Commercial Cleaners Ltd., $420 for cleaning the premises in the first half of the month. Cheques issued: No. 377 to Craig Stationers, $35 for supplies. No. 378 to International Film Distributors, $890 on account. No. 379 to J. Bernstein, the owner, $1300 for personal drawings. No. 380, $2890 for salaries from February 1-14.
21	Cash register tapes from the box office for the week show transactions No. 2562 to No. 3336 for total sales of $8132. Weekly sales report for the confectionary shows a total of $657 as the theatres share of sales. Purchase invoices received: No. 571985 from Air Canada, $178 for transportation of film. No. DC475 from CCHH Radio and TV, $371 for spot advertising. No. 329F from Stinson Fuels, $356 for heating oil. Cheques issued: No. 381 to Electronics Canada Ltd., $256 on account. No. 382 to The Daily Sentinel, $750 on account. No. 383 to Triangle Office Supply, $445 for supplies.
28	Cash register tapes from the box office for the week show transactions No. 3337 to No. 4049 for total sales of $7483. Weekly sales report for the confectionary shows a total of $589 as the theatres share of sales. Purchase invoices received: No. 6315 from International Film Distributors, $2658 for rental of film from February 8 to 28. No. T699 from Commercial Cleaners Ltd., $435 for cleaning of premises. Cheques issued: No. 384 to Commercial Cleaners Ltd., $420 on account. No. 385 to J. Bernstein, the owner, $1300 for personal drawings. No. 386, $2635 for salaries from February 15-28.

Additional information for February: Supplies on hand, February 28, were valued at $300.

Community Theatre Trial Balance January 31, 20-. \begin{tabular}{lcrrr} \multicolumn{1}{c}{ Account } & Acc. No. & Debit & Credit \\ Cash & 100 & 5653 & \\ Prepaid Rent & 115 & 6000 & \\ Prepaid Insurance & 116 & 1800 & \\ Office Supplies & 117 & 520 & \\ Projection Equipment & 120 & 20000 & \\ Fumiture & 125 & 78563 & \\ Accounts Payable & 200 & & $90 \\ Bank Loan & 201 & & 10387 \\ J. Bemstein, Capital & 300 & & 94212 \\ J. Bemstein, Drawings & 301 & 2600 & \\ Ticket Sales & 400 & & 25493 \\ Confectionary Income & 401 & & 2407 \\ Salaries Expense & 500 & 6801 & \\ Advertising Expense & 501 & 2463 & \\ Film Rental Expense & 502 & 3563 & \\ Cleaning Expense & 503 & 850 & \\ Telephone and Intemet Expense & 504 & 195 & \\ Equipment Repairs \& Maintenance & 505 & 2293 & \\ Expense & & & 248 & \\ Film Transportation Expense & 506 & 858 & \\ Heating Expense & 507 & 632 & \\ Electricity and Water Expense & 508 & 350 & \\ General Expense & 509 & & & \\ & & 5133389 & 5133389 \\ \hline \end{tabular} Additional Accounts AccumulatedDepreciation-EquipmentAccumulatedDepreciation-FurnitureIncomeSummaryDepreciationExpense-EquipmentDepreciationExpense-FurnitureRentExpenseInsuranceExpenseSuppliesExpense121126302510511512513514 Community Theatre Trial Balance January 31, 20-. \begin{tabular}{lcrrr} \multicolumn{1}{c}{ Account } & Acc. No. & Debit & Credit \\ Cash & 100 & 5653 & \\ Prepaid Rent & 115 & 6000 & \\ Prepaid Insurance & 116 & 1800 & \\ Office Supplies & 117 & 520 & \\ Projection Equipment & 120 & 20000 & \\ Fumiture & 125 & 78563 & \\ Accounts Payable & 200 & & $90 \\ Bank Loan & 201 & & 10387 \\ J. Bemstein, Capital & 300 & & 94212 \\ J. Bemstein, Drawings & 301 & 2600 & \\ Ticket Sales & 400 & & 25493 \\ Confectionary Income & 401 & & 2407 \\ Salaries Expense & 500 & 6801 & \\ Advertising Expense & 501 & 2463 & \\ Film Rental Expense & 502 & 3563 & \\ Cleaning Expense & 503 & 850 & \\ Telephone and Intemet Expense & 504 & 195 & \\ Equipment Repairs \& Maintenance & 505 & 2293 & \\ Expense & & & 248 & \\ Film Transportation Expense & 506 & 858 & \\ Heating Expense & 507 & 632 & \\ Electricity and Water Expense & 508 & 350 & \\ General Expense & 509 & & & \\ & & 5133389 & 5133389 \\ \hline \end{tabular} Additional Accounts AccumulatedDepreciation-EquipmentAccumulatedDepreciation-FurnitureIncomeSummaryDepreciationExpense-EquipmentDepreciationExpense-FurnitureRentExpenseInsuranceExpenseSuppliesExpense121126302510511512513514