Quiz

Dear esteemed students,
To adequately prepare for the midterm FA examination, additional practice questions have been
compiled to facilitate a thorough understanding of the subject matter. The examination has
three questions and requires completion in collaboration with other group members. The
prescribed format must be adhered to when submitting the quiz.
Group members:
1. Student name ……… ID………….. Contribution ……………..

The outcome will not be acknowledged if it is missing any of the following pieces of information.
Wishing you the best of luck.

Question 1:
The Starr Theater, owned by Meg Vargo, will begin operations in March. The Starr will be unique
in that it will show only triple features of sequential theme movies. As of March 1, the ledger of
Starr showed: No. 101 Cash $3,000, No. 140 Land $24,000, No. 145 Buildings (concession stand,
projection room, ticket booth, and screen) $10,000, No. 157 Equipment $10,000, No. 201
Accounts Payable $7,000, and No. 301 Owner’s Capital $40,000. During the month of March,
the following events and transactions occurred.
Mar. 2. Rented the three Indiana Jones movies to be shown for the first 3 weeks of March. The
film rental was $3,500; $1,500 was paid in cash and $2,000 will be paid on March 10.
3 Ordered the Lord of the Rings movies to be shown the last 10 days of March. It will
cost $200 per night.
9 Received $4,300 cash from admissions.
10 Paid balance due on Indiana Jones movies rental and $2,100 on March 1 accounts
payable.
11 Starr Theater contracted with Adam Ladd to operate the concession stand. Ladd is to
pay 15% of gross concession receipts, payable monthly, for the rental of the concession stand.
12 Paid advertising expenses $900.
20 Received $5,000 cash from customers for admissions.
20 Received the Lord of the Rings movies and paid the rental fee of $2,000.
31 Paid salaries of $3,100.
31 Received statement from Adam Ladd showing gross receipts from concessions of
$6,000 and the balance due to Starr Theater of $900 ($6,000 3 15%) for March. Ladd paid one-
half the balance due and will remit the remainder on April 5.
31 Received $9,000 cash from customers for admissions.
In addition to the accounts identified above, the chart of accounts includes: No. 112 Accounts
Receivable, No. 400 Service Revenue, No. 429 Rent Revenue, No. 610 Advertising Expense, No.
726 Salaries and Wages Expense, and No. 729 Rent Expense.
Instructions
(a) Enter the beginning balances in the ledger. Insert a check mark (✓) in the reference
column of the ledger for the beginning balance.
(b) Journalize the March transactions. Starr records admission revenue as service revenue,
rental of the concession stand as rent revenue, and film rental expense as rent expense.
(c) Post the March journal entries to the ledger. Assume that all entries are posted from page 1
of the journal.
(d) Prepare a trial balance on March 31, 2017
Question 2:
Vang Management Services began business on January 1, 2017, with a capital investment of
$120,000. The company manages condominiums for owners (Service Revenue) and rents space
in its own office building (Rent Revenue). The trial balance and adjusted trial balance columns of
the worksheet at the end of the first year are as follows:
Instructions
(a) Journalize the adjusting entries.
(b) Journalize the closing entries.

(c) Prepare the income statement
Question 3:
Yolanda Hagen, a former disc golf star, operates Yolanda’s Discorama. At the beginning of the
current season on April 1, the ledger of Yolanda’s Discorama showed Cash $1,800, Inventory
$2,500, and Owner’s Capital $4,300. The following transactions were completed during April.
Apr. 5 Purchased golf discs, bags, and other inventory on account from Mumford Co. $1,200,
FOB shipping point, terms 2/10, n/60.
7 Paid freight on the Mumford purchase $50.
9 Received credit from Mumford Co. for merchandise returned $100.
10 Sold merchandise on account for $900, terms n/30. The merchandise sold had a cost
of $540.
12 Purchased disc golf shirts and other accessories on account from Saucer Sportswear
$670, terms 1/10, n/30.
14 Paid Mumford Co. in full.
17 Received credit from Saucer Sportswear for merchandise returned $70.
20 Made sales on account for $610, terms n/30. The cost of the merchandise sold was
$370.
21 Paid Saucer Sportswear in full.
27 Granted an allowance to customers for clothing that was flawed $20.
30 Received payments on account from customers $900.
Instructions
Journalize the April transactions using a perpetual inventory system.

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Dear esteemed students,

1. Student name ……… ID………….. Contribution ……………..

Wishing you the best of luck.

9 Received $4,300 cash from admissions.

12 Paid advertising expenses $900.

20 Received $5,000 cash from customers for admissions.

31 Paid salaries of $3,100.

31 Received $9,000 cash from customers for admissions.

(d) Prepare a trial balance on March 31, 2017

(a) Journalize the adjusting entries.

(b) Journalize the closing entries.

7 Paid freight on the Mumford purchase $50.

9 Received credit from Mumford Co. for merchandise returned $100.

14 Paid Mumford Co. in full.

17 Received credit from Saucer Sportswear for merchandise returned $70.

21 Paid Saucer Sportswear in full.

27 Granted an allowance to customers for clothing that was flawed $20.

30 Received payments on account from customers $900.

Journalize the April transactions using a perpetual inventory system.

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