The following business transactions were completed by RialtoTheatre Corporation from January 1 to 31, 2019.
- Received and deposited in a bank account $500,000 for capitalstock.
- Purchased the Twin City Drive-In Theatre for $1,000,000,allocated as follows: land $300,000; buildings $375,000; equipment$325,000. Paid $400,000 in cash and gave a mortgage note for theremainder.
- Entered into a contract for the operation of the refreshmentstand concession at a rental of 10% of the concessionaire’s sales,with a guaranteed minimum of $5,000 a month, payable in advance.Received cash of $5,000 as the advance payment for January.
- Paid premiums for property and casualty insurance policies,$30,000.
- Purchased supplies, $7,500 and equipment, $14,500, onaccount.
- Paid for January billboard and newspaper advertising,$6,500.
- Cash received from admission for the first week, $34,000.
- Paid miscellaneous expense, $2,200.
- Paid semimonthly wages, $24,000.
- Cash received for admission for the second week,$36,000.
- Paid miscellaneous expense, $1,750.
- Paid cash to creditors on account, $20,900.
- Cash received for admissions for the third week,$41,500.
- Purchased supplies for cash, $1,700.
- Paid for advertising leaflets for June, $1,500.
- Recorded invoice of $45,000 for rental of film for January.Payment is due on February.
- Paid electricity and water bills, $6,000.
- Paid semimonthly wages, $24,500.
- Cash received from admissions for the fourth week of the month,$37,000.
- Recorded additional amount owed by the concessionaire for themonth of January; sales for the month totaled $55,000. Rentalcharges in excess of the advance payment of $5,000 are not due andpayable until February.
Prepare the financial statements (including the trial balance)and calculate the Acid Test Ratio, the Assets Turnover Ratio andthe Return on Equity for Rialto Theatre Company for January2019.
