Question

#8

he King Street Zoo operates a drive-through tourist attraction in Toronto. The company adjusts its

accounts at the end of each month. The selected accounts appearing below reflect balances after

adjusting entries were prepared on April 30. The adjusted trial balance shows the following:

Prepaid Rent	$12,000
Feed Shed	$40,000
Accumulated Depreciation – Feed Shed	$6,000
Unearned Revenue	$500

...

Other data:

1.     4 months rent had been prepared on April 1.

2.     The Feed Shed is being depreciated at $7,200 per year.

3.     The unearned revenue represents tickets sold for future zoo visits. The tickets sold were at $4.00 each on April 1. During April, 25 of the tickets were used by customers

Calculate the following:
How many tickets were sold on April 1

Answer 1

Answer:

Number of Tickets sold on April 1 = Unadjusted Unearned Revenue/ Selling price per Ticket
Unearned Revenue affected due to adjustment = 25 * $4.00
Unearned Revenue affected due to adjustment = $100

Adjusted Unearned Revenue = Unadjusted Unearned revenue – Unearned Revenue affected due to adjustment
$500 = Unadjusted Unearned Revenue - $100
Unadjusted Unearned Revenue = $600

Number of Tickets sold on April 1 = 600 / 4
Number of Tickets sold on April 1 = 125 tickets