Topics: Generally Accepted Accounting Principles, Income, Depreciation Pages: 2 (498 words) Published: November 8, 2012
Problem 4.4A
Preparing Adjusting Entries from a Trial Balance

The Off-Campus Theater adjusts its accounts every month. Below is the company’s unadjusted trial balance dated July 31, 2002. Additional information is provided for use in preparing the company’s adjusting entries for the month of July. (Bear in mind that adjusting entries have already been made for the first seven months of 2002, but not for July.)

Unadjusted Trial Balance
July 31, 2002
Cash$ 16,200
Prepaid film rental28,000
Accumulated depreciation: building$ 16,000
Fixtures and equipment12,000
Accumulated depreciation: fixtures and equipment3,000
Notes payable190,000
Accounts payable3,200
Unearned admissions revenue (YMCA)1,200
Income taxes payable6,100
Capital Stock50,000
Retained earnings29,440
Admissions revenue290,200
Concessions revenue17,460
Salaries expense62,900
Film rental expense87,000
Utilities expense6,300
Depreciation expense: building3,000
Depreciation expense: fixtures and equipment1,500
Interest expense8,500
Income taxes expense 30,000________

Other Data
1. Film rental expense for the month is $14,200. However, the film rental expense for several months has been paid in advance. 2. The building is being depreciated over a period of 40 years (480 months). 3. On the first of each month, the theater pays the interest which accrued in the prior month on its note payable. At July 31, accrued interest payable on this note amounts to $1,583. 4. The theater allows local nursing homes to bring seniors to the movies on any weekday afternoon for a fixed price of $400 per month. On June 30, the nursing home made a $1,200 advance...
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