The following independent items for ThÃ©Ã¢tre Dupuis during the year ended November 30, 2014, may require a transa
The following independent items for ThÃ©Ã¢tre Dupuis during the year ended November 30, 2014, may require a transaction journal entry, an adjusting entry, or both. The company records all prepaid costs as assets and all unearned revenues as liabilities and adjusts accounts annually.
1. Supplies on hand amounted to $650 on November 30, 2013. On January 31, 2014, additional supplies were purchased for $1,975 cash. On November 30, 2014, a physical count showed that supplies on hand amounted to $440.
2. ThÃ©Ã¢tre Dupuis puts on 10 plays each season. Season tickets sell for $210 each and 245 were sold in August for the upcoming 2014-2015 season, which starts in September 2014 and ends in June 2015 (one play per month). ThÃ©Ã¢tre Dupuis credited Unearned Revenue for the full amount received.
3. The total payroll for the theatre is $4,500 every Wednesday for employee salaries earned during the previous five-day week (Wednesday through Sunday). Salaries were last paid (and recorded) on Wednesday, November
26. In 2014, November 30 falls on a Sunday. Th e next payday is Wednesday, December 3, 2014.
4. ThÃ©Ã¢tre Dupuis rents the theatre to a local seniors' choir, which uses the space for rehearsals twice a week at a rate of $425 per month. The new treasurer of the choir accidentally sent a cheque for $245 on November 1. The treasurer promised to send a cheque in December for the balance when she returns from her vacation. On
December 4, ThÃ©Ã¢tre Dupuis received a cheque for the balance owing from November plus all of December's rent.
5. On June 1, 2014, borrowed $14,000 from La caisse populaire Desjardins at an annual interest rate of 5.5%. The principal and interest are to be repaid on February 1, 2015.
6. Upon reviewing the books on November 30, 2014, it was noted that the utility bill for the month of November had not yet been received. A call to Hydro-QuÃ©bec determined that the utility bill was for $935. The bill was paid on December 10.
7. Owned a truck during the year that had originally been purchased on December 1, 2010, for $37,975. The truck's estimated useful life is seven years.
(a) Prepare the journal entries to record the original transactions for items 1 through 5.
(b) Prepare the year-end adjusting entry for items 1 through 7.
(c) Prepare the journal entry to record:
1. The payment of wages on Wednesday, December 3 (item 3)
2. The receipt of the cheque from the seniors' choir on December 4 (item 4)
3. The payment of the utility bill on December 10 (item 6)
4. The payment of the note and interest on February 1, 2015 (item 5)
TAKING IT FURTHER There are three basic reasons why an unadjusted trial balance may not contain complete or up-to-date data. List these reasons and provide examples of each one using items 1 to 7 to illustrate your explanation.