[SOLVED] Campus Theater adjusts its accounts every month.

Campus Theater adjusts its accounts every month. The companyâ€™s unadjusted trial balance dated August 31, current year, appears as follows. Additional information is provided for use in preparing the companyâ€™s adjusting entries for the month of August. (Bear in mind that adjusting entries have already been made for the first seven months of current year, but not for August.)

Other Data: 1. Film rental expense for the month is $18,240. However, the film rental expense for several months has been paid in advance. 2. The building is being depreciated over a period of 20 years (240 months). 3. The fixtures and equipment are being depreciated over a period of five years (60 months). 4. On the first of each month, the theater pays the interest that accrued in the prior month on its note payable. At August 31, accrued interest payable on this note amounts to $1,800. 5. The theater allows the local YMCA to bring children attending summer camp to the movies on any weekday afternoon for a fixed fee of $600 per month. On June 28, the YMCA made a $1,800 advance payment covering the months of July, August, and September. 6. The theater receives a percentage of the revenue earned by Tastie Corporation, the concessionaire operating the snack bar. For snack bar sales in August, Tastie owes Campus Theater $2,700, payable on September 10. No entry has yet been made to record this revenue. (Credit Concessions Revenue.) 7. Salaries earned by employees, but not recorded or paid as of August 31, amount to $2,040. No entry has yet been made to record this liability and expense. 8. Income taxes expense for August is estimated at $5,040. This amount will be paid in the September 15 installment payment. 9. Utilities expense is recorded as monthly bills are received. No adjusting entries for utilities expense are made at month-end. Instructions: a. For each of the numbered paragraphs, prepare the necessary adjusting entry (including an explanation). b. Refer to the balances shown in the unadjusted trial balance at August 31. How many months of expense are included in each of the following account balances? (Remember, Campus Theater adjusts its accounts monthly. Thus, the accounts shown were last adjusted on July 31, current year.) 1. Utilities Expense 2. Depreciation Expense 3. Accumulated Depreciation: Building 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.

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CAMPUS THEATER UNADJUSTED TRIAL BALANCE AUGUST 31, CURRENT YEAR Cash $ 24,000 Prepaid fim rental Land Bulkding . Accumutatod depreciabon: bulding Rdures and equilpment. 37440 144,000 201,600 $ 16,800 43,200 Accumulated deprociation: bduros and equipment 14,400 Notes payable . Accounts payable . Uneamed admisions revenue (YMCA) Income tes payable Capital stock . Retamed eamngs 216,000 5,280 1,200 5,688 48,000 55,932 DIMidends . 18,000 Admissions revonue 366,240 Concessions revenue 17,220 Salarlos axpense 82,200 Flm rental expense 113,400 Ues expense 11,400 Deprectaltion expense: building Deprecialion expense: cures and equipment 5,880 5,040 Intorost oxpense. 12,600 Income taxes epense 48,000 $746,760 * $746,760

Question: Campus Theater adjusts its accounts every month.

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