Kimberly Clark (KC), maker of Scott paper products, decided to hold a managers’ meeting in Hawaii in February. To take advantage of special fares, KC purchased airline tickets in advance from Alaska Airlines at a total cost of $65,000. These were acquired on December 1 for cash.
Using the balance sheet equation format (refer to page 144 for an example), analyze the impact of the December payment and the February travel on the financial position of both KC and Alaska. Also prepare journal entries for February for both companies.