Adjusting Entries
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The Duquesne Theater adjusts its accounts every month. Below is the company's unadjusted trial balance
dated August 31, 2005. Additional information is provided for use in preparing the company's
adjusting entries for the month of August. (Bear in mind that adjusting entries have already been
made for the first seven months of 2005, but not for August.)
DUQUESNE THEATER
Unadjusted Trial Balance
August 31, 2005
Cash $20,000
Prepaid film rental 31,200
Land 120,000
Building 168,000
Accumulated depreciation: building $14,000
Fixtures and equipment 36,000
Accumulated depreciation: fixtures and equipment 12,000
Notes payable 180,000
Accounts payable 4,400
Unearned admissions revenue (YMCA) 1,000
Income taxes payable 4,740
Capital stock 40,000
Retained earnings 46,640
Dividends 15,000
Admissions revenue 305,200
Concessions revenue 14,350
Salaries expense 68,500
Film rental expense 94,500
Utilities expense 9,500
Depreciation expense: building 4,900
Depreciation expense: fixtures and equipment 4,200
Interest expense 10,500
Income taxes expense 40,000
$622,300 $622,330
Other Data:
(1) Film rental expense $15,200
(2) Building depreciation period 240 months
(3) Fixtures and equipment depreciation period 60 months
(4) Interest payable on the note payable $1,500
(5) YMCA fixed fee per month 500
YMCA advance payment 1,500
(6) Snack bar revenue payable on September 10 2,250
(7) Salaries earned 1,700
(8) Income taxes expense for August 4,200
(9) Utilities expense recorded as bills are received
Instructions:
(a) For each of the numbered paragraphs, prepare the necessary adjusting entry (including an explanation).
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The solution has the adjusting entries for Duquesne Theater problem.
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The Duquesne Theater adjusts its accounts every month. Below is the company's unadjusted trial balance dated August 31, 2005. Additional information is provided for use in preparing the company's adjusting entries for the month of August. (Bear in mind that adjusting entries have already been made for the first seven months of 2005, but not for August.)
DUQUESNE THEATER
Unadjusted Trial Balance
August 31, 2005
Cash $20,000
Prepaid film rental 31,200
Land 120,000
Building 168,000
Accumulated depreciation: building $14,000
Fixtures and equipment 36,000
Accumulated depreciation: fixtures and equipment 12,000
Notes payable 180,000
Accounts payable 4,400
Unearned admissions revenue (YMCA) 1,000
Income taxes payable 4,740
Capital stock 40,000
Retained earnings 46,640
Dividends 15,000
Admissions revenue 305,200
Concessions revenue 14,350
Salaries expense 68,500
Film rental expense 94,500
Utilities expense 9,500
Depreciation expense: building 4,900
Depreciation expense: fixtures and equipment 4,200 ...
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