Rental Income Journal

							                                         Student Name:
                                                 Class:
                                                          Problem 04-03

                          GUNFLINT ADVENTURES

Calculations:
  (1) Age of airplane in months:
        Monthly depreciation expense
        Age (number of months accumulated)

  (2)    Monthly airport rent expense:
         Remaining prepaid rent
         Months remaining
         Monthly airport rent expense

  (3)    Amount paid for insurance policy on Feb. 1
         Remaining unexpired insurance
         Months remaining
         Amount paid for insurance policy on Feb. 1


                          GUNFLINT ADVENTURES
                              General Journal

 20__                    Account Titles                   Debit       Credit
                                       (1)
Jun 30   Depreciation Expense
           Accumulated depreciation: Airplane
                                       (2)
    30   Airport Rent Expense
           Prepaid Airport Rent
                                       (3)
    30   Insurance Expense
           Unexpired Insurance
                                       (4)
    30   Unearned Passenger Revenue
           Passenger Revenue Earned
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

           Account Titles                                                Debit     Credit
                                     (1)
Aug. 31

                                     (2)
      31

                                     (3)
      31

                                     (4)
      31

                                     (5)
      31

                                     (6)
      31

                                     (7)
      31

                                     (8)
      31

                                     (9)
      31



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)
                                                      Student Name:
                                                              Class:
                                                                       Problem 04-04

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.
Given Data P04-04:

                            CAMPUS THEATER
                           Unadjusted Trial Balance
                              August 31, 2009

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) Interest payable on the note payable               $ 1,500
 (5) YMCA fixed fee per month                                500
     YMCA advance payment                                  1,500
 (6) Snack bar revenue payable 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