Vail Resorts, Inc., owns and operates five premier year-round ski resort properties (Vail Mountain, Beaver Creek Resort,
Question:
a. Borrowed $2,300,000 from the bank on December 1, signing a note payable due in six months.
b. Purchased a new snowplow for $98,000 cash on December 31.
c. Purchased ski equipment inventory for $35,000 on account to sell in the ski shops.
d. Incurred $62,000 in routine maintenance expenses for the chairlifts; paid cash.
e. Sold $390,000 of January through March season passes and received cash.
f. Sold a pair of skis from a ski shop to a customer for $800 on account. (The cost of the skis was $500).
g. Sold daily lift passes in December for a total of $320,000 in cash.
h. Received a $3,500 deposit on a townhouse to be rented for five days in January.
i. Paid half the charges incurred on account in (c).
j. Received $400 on account from the customer in (f).
k. Paid $245,000 in wages to employees for the month of December.
Required:
1. Prepare journal entries for each transaction. (Remember to check that debits equal credits and that the accounting equation is in balance after each transaction.)
2. Assume that Vail Resorts had a $1,000 balance in Accounts Receivable at the beginning of December. Determine the ending balance in the Accounts Receivable account at the end of December based on transactions (a) through (k). Show your work in T-account format.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Financial Accounting
ISBN: 978-0078025556
8th edition
Authors: Robert Libby, Patricia Libby, Daniel Short
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