Student Name:

Class:
Problem 04-03

GUNFLINT ADVENTURES

Calculations:
(1) Age of airplane in months:
Monthly depreciation expense
Age (number of months accumulated)
36
(2) Monthly airport rent expense:
Remaining prepaid rent
Months remaining
Monthly airport rent expense
1800
(3) Amount paid for insurance policy on Feb. 1
Remaining unexpired insurance
Months remaining
Amount paid for insurance policy on Feb. 1
6000

GUNFLINT ADVENTURES
General Journal

20__ Account Titles Debit Credit

(1)
Jun 30 Depreciation Expense
Accumulated depreciation: Airplane 1000
To record June depreciation expense on airplane.

(2)
30 Airport Rent Expense
Prepaid Airport Rent 1800
Recognizing rent expense for June.

(3)
30 Insurance Expense
Unexpired Insurance 500
Recognizing insurance expense for June.

(4)
30 Unearned Passenger Revenue
Passenger Revenue Earned 75000
Recording portion of unearned revenue earned in June.
Given Data P04-03:

GUNFLINT ADVENTURES

Selected account balances: Debit Credit

Prepaid airport rent $ 7,200
Unexpired insurance 3,500
Airplane 240,000
Accumulated Depreciation: Airplane $ 36,000
Unearned passenger revenue 90,000

Additional information:
(1) Useful life of airplane in years 20
Residual value of airplane 0
(2) Unearned passenger revenue per ticket $ 300
(3) Number of months covered in prepaid rent 6
(4) Term (months) of insurance purchased Feb. 1 12
(5) Passenger revenue earned in June $ 75,000
 Student Name:
Class:
Problem 04-04

CAMPUS THEATER
General Journal

2011 Account Titles Debit Credit

(1)
Aug. 31

Film rental expense incurred in August.

(2)
31

To record August depreciation expense.

(3)
31

To record August depreciation.

(4)
31

Interest expense accrued in August.

(5)
31

To record advance payment from YMCA earned in August.

(6)
31

To record accrued concessions revenue in August.

(7)
31

To record accrued salary expense in August.

(8)
31

To record income taxes accrued in August.

(9)
 Student Name:
Class:
Problem 04-04

31
 Student Name:
Class:
Problem 04-04

b. Review the unadjusted trial balance at August 31. How many months of expense are included
in (1) Utilities Expense, (2) Depreciation expense, (3) Accumulated Depreciation: Building?

(1)

(2)

(3)

c. Assume the theater has been operating profitably all year. Although the August 31 trial balance
shows substantial income taxes expense, income taxes payable is a much smaller amount. This
relationship is quite normal throughout much of the year. Explain.
CAMPUS THEATER
General Journal

15200

700

600

1500

500

2250

1700

4200
0
Given Data P04-04:

CAMPUS THEATER
Unadjusted Trial Balance
August 31, 2011

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 46,610
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 $ 622,300

Additional Information:
(1) Film rental expense $ 15,200
(2) Building depreciation period 240 months
(3) Fixtures and equipment depreciation period 60 months
(4) Accrued Interest payable on the note payable $ 1,500
(5) YMCA fixed fee per month $ 500
YMCA advance payment $ 1,500
(6) Snack bar revenue receivable 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