uchas otce suples agreed to a local ball by the Oh of the following tod s for services performed during the month and gave them un yhe 16th of the following month to pay Received cash on account from clients for services rendered to them in past monts Paid employees solares and wages carred during the month pod newspaper for company ads appanng during the month ved months and electric bil from the correny, payments duerytime with the first ten days of the following month Computed amount of taxes due based on the income of the period amount will be paid in the following month Problem 3-9 Transaction Analysis and Journal Entries Recorded LO3. 4. 5 Directly in T Accounts (Appendix) Four brothers organized Beverly Entertainment Enterprises on October 1. The following trans stions occurred during the first month of operations: October 1: Received contributions of $10,000 from each of the four principal owners of the Reccede new business in exchange for shares of stock. October 2: Purchased the Ace Theater for $125.000. The seller agreed to accept a down payment of $12,500 and a seven-year promissory note for the balance. The Ace property consists of land valued at $35,000, and a building valued at $90,000. October 3: Purchased new seats for the theater at a cost of $5.000, paying $2,500 down and agreeing to pay the remainder in 60 days. October 12: Purchased candy, popcorn, cups, and napkins for $3,700 on an open account. The company has 30 days to pay for the concession supplies. October 13: Sold tickets for the opening-night movie for cash of $1,800 and took in $2,400 Sold ich at the concession stand. October 17: Rented out the theater to a local community group for $1,500. The community group is to pay one-half of the bill within five working days and has 30 days to pay the remainder. October 23: Received 50% of the amount billed to the community group. October 24: Sold movie tickets for cash of $2.000 and took in $2,800 at the concession stand. October 26: The four brothers, acting on behalf of Beverly Entertainment, paid a dividend of $750 on the shares of stock owned by each of them, or $3,000 in total. October 27: Paid $500 for utilities. October 30: Paid wages and salaries of $2,400 total to the ushers, projectionist, concession stand workers, and maintenance crew. October 31: Sold movie tickets for cash of $1,800 and took in $2,500 at the concession stand. Required 1. Prepare a table to summarize the preceding transactions as they affect the accounting cqua. tion. Ignore depreciation expense and interest expense. Use the format in Exhibit 3-1. Iden- tify each transaction with a date. 2. Record each transaction directly in T accounts using the dates preceding the transactions to identify them in the accounts. Each account involved in the problem needs a separate T account. LO4. Problem 3-10 Trial Balance and Financial Statements (Appendix) Refer to the table for Beverly Entertainment Enterprises in part (1) of Problem 3-9. (Continued)
