The following independent events for Splish Brothers Theatre Ltd. during the year ended November 30, 2024, require a journal entry or an adjusting journal entry, or both. The company adjusts its accounts annually.1. On June 1, 2024, the theatre purchased vehicles for $74,000 cash. The vehicles’ estimated useful life is five years and the company uses straight-line depreciation.2. The theatre puts on eight plays each season. This year’s season starts in October 2024 and ends in May 2025 (one play per month). Season tickets sell for $350. On October 1, 410 season tickets were sold for the 2024–2025 season. The theatre credited Deferred Revenue for the full amount received on October 1 and uses a Ticket Revenue account to record revenue earned from season tickets.3. Supplies on hand amounted to $1,050 at the beginning of the year. On February 16, additional Supplies were purchased for cash at a cost of $2,120. At the end of the year, a physical count showed that supplies on hand amounted to $550.4. On June 1, 2024, the theatre borrowed $102,000 from the Bank of Montreal at an interest rate of 6%. The principal is to be repaid in one year. The interest is payable on the first day of each following month, and was last paid on November 1.5. Splish Brothers Theatre rents a portion of its facilities for $400 a month to a local dance club that uses the space for rehearsals. On November 2, the dance club’s treasurer made a mistake and accidentally sent a cheque for only $40 for the November rent. (Hint: Use the Deferred Revenue account to record the rent received in advance.) The dance club’s treasurer promised to send a cheque in December for the balance when she returned from vacation. On December 4, the theatre received a $360 cheque for the balance owing from November.6. The total weekly payroll is $6,300, paid every Monday for employee salaries earned during a seven-day workweek running from Sunday to Saturday. Salaries were last paid (and recorded) on Monday, November 25, and will be paid next on Monday, December 2. November 30 falls on a Saturday this year.7. Upon reviewing its income tax calculations on November 30, the theatre noted that an additional $1,280 of income tax was owed. This additional amount was paid on December 14. ». Date Account Titles and ExplanationNov.30,2024Nov.30,2024Nov.30,2024Depreciation ExpenseAccumulated Depreciation - VehiclesDeferred RevenueTicket RevenueSupplies ExpenseSuppliesDebit7,4003502,620Credit7,400TO3502,620

Deferred revenue is unearned revenue for products or services that are to be delivered in the…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following independent events for Splish Brothers Theatre Ltd. during the year ended November 30, 2024, require a journal entry or an adjusting journal entry, or both. The company adjusts its accounts annually.

1.		On June 1, 2024, the theatre purchased vehicles for $74,000 cash. The vehicles’ estimated useful life is five years and the company uses straight-line depreciation.
2.		The theatre puts on eight plays each season. This year’s season starts in October 2024 and ends in May 2025 (one play per month). Season tickets sell for $350. On October 1, 410 season tickets were sold for the 2024–2025 season. The theatre credited Deferred Revenue for the full amount received on October 1 and uses a Ticket Revenue account to record revenue earned from season tickets.
3.		Supplies on hand amounted to $1,050 at the beginning of the year. On February 16, additional Supplies were purchased for cash at a cost of $2,120. At the end of the year, a physical count showed that supplies on hand amounted to $550.
4.		On June 1, 2024, the theatre borrowed $102,000 from the Bank of Montreal at an interest rate of 6%. The principal is to be repaid in one year. The interest is payable on the first day of each following month, and was last paid on November 1.
5.		Splish Brothers Theatre rents a portion of its facilities for $400 a month to a local dance club that uses the space for rehearsals. On November 2, the dance club’s treasurer made a mistake and accidentally sent a cheque for only $40 for the November rent. (Hint: Use the Deferred Revenue account to record the rent received in advance.) The dance club’s treasurer promised to send a cheque in December for the balance when she returned from vacation. On December 4, the theatre received a $360 cheque for the balance owing from November.
6.		The total weekly payroll is $6,300, paid every Monday for employee salaries earned during a seven-day workweek running from Sunday to Saturday. Salaries were last paid (and recorded) on Monday, November 25, and will be paid next on Monday, December 2. November 30 falls on a Saturday this year.
7.		Upon reviewing its income tax calculations on November 30, the theatre noted that an additional $1,280 of income tax was owed. This additional amount was paid on December 14.

». Date Account Titles and Explanation
Nov.
30,
2024
Nov.
30,
2024
Nov.
30,
2024
Depreciation Expense
Accumulated Depreciation - Vehicles
Deferred Revenue
Ticket Revenue
Supplies Expense
Supplies
Debit
7,400
350
2,620
Credit
7,400
TO
350
2,620

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