Pikes Peak is a ski resort in upstate New York. The company sells lift tickets, ski lessons, and ski equipment. It operates several restaurants and rents townhouses to vacationing skiers. The following hypothetical December transactions are typical of those that occur at the resort. a Borrowed $640,000 from the bank on December 1, signing a note payable, due in six months. b. Purchased a new snowplow for $34,750 cash on December 31. c. Purchased ski supplies for $17,800 on account. d. Incurred $26,900 in routine maintenance expenses for the chairlifts; paid cash. e. Received $74,000 for season passes (beginning in the new year). fDaily lift passes were sold this month for a total of $92,200 cash. g. Received a $750 deposit on a townhouse to be rented for five days in January. h. Paid half the charges incurred on account in (c) /. Incurred and paid $26,500 in wages to employees for the month of December. Required: 1. Prepare accrual basis journal entries for each transaction. 2. Calculate the company's preliminary net income.

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Chapter1: Financial Statements And Business Decisions
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Pikes Peak is a ski resort in upstate New York. The company sells lift tickets, ski lessons, and ski equipment. It operates several
restaurants and rents townhouses to vacationing skiers. The following hypothetical December transactions are typical of those that
occur at the resort.
a Borrowed $640,000 from the bank on December 1, signing a note payable, due in six months.
b. Purchased a new snowplow for $34,750 cash on December 31.
c. Purchased ski supplies for $17,800 on account.
d. Incurred $26,900 in routine maintenance expenses for the chairlifts; paid cash.
e. Received $74,000 for season passes (beginning in the new year).
f. Daily lift passes were sold this month for a total of $92,200 cash.
g. Received a $750 deposit on a townhouse to be rented for five days in January.
h. Paid half the charges incurred on account in (c)
Incurred and paid $26,500 in wages to employees for the month of December.
Required:
1. Prepare accrual basis journal entries for each transaction..
2. Calculate the company's preliminary net income.
Transcribed Image Text:Pikes Peak is a ski resort in upstate New York. The company sells lift tickets, ski lessons, and ski equipment. It operates several restaurants and rents townhouses to vacationing skiers. The following hypothetical December transactions are typical of those that occur at the resort. a Borrowed $640,000 from the bank on December 1, signing a note payable, due in six months. b. Purchased a new snowplow for $34,750 cash on December 31. c. Purchased ski supplies for $17,800 on account. d. Incurred $26,900 in routine maintenance expenses for the chairlifts; paid cash. e. Received $74,000 for season passes (beginning in the new year). f. Daily lift passes were sold this month for a total of $92,200 cash. g. Received a $750 deposit on a townhouse to be rented for five days in January. h. Paid half the charges incurred on account in (c) Incurred and paid $26,500 in wages to employees for the month of December. Required: 1. Prepare accrual basis journal entries for each transaction.. 2. Calculate the company's preliminary net income.
Prepare accrual basis journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal
Entry Required in the first account field.)
Transaction
No
1
2
3
4
5
6
7
9
b.
C
d
e
(
9
Cash
Notes Payable (short-term)
Equipment
Cash
Supplies
Accounts Payable
Repairs and Maintenance Expense
Cash
Cash
Accounts Receivable
Cash
General Journal
Service Revenue
Cash
Service Revenue
Salaries and Wages Expense
Cash
Required 1
33
>>
O
››
00
O
00
30
00
**
Required 2 >
Debit
640,000
34,750
17,800
26,900
74,000
92,200
7500
26,500
Credit
640,000
34,750
17,800
26,900
74,000
92,200
750
26,500
Transcribed Image Text:Prepare accrual basis journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) Transaction No 1 2 3 4 5 6 7 9 b. C d e ( 9 Cash Notes Payable (short-term) Equipment Cash Supplies Accounts Payable Repairs and Maintenance Expense Cash Cash Accounts Receivable Cash General Journal Service Revenue Cash Service Revenue Salaries and Wages Expense Cash Required 1 33 >> O ›› 00 O 00 30 00 ** Required 2 > Debit 640,000 34,750 17,800 26,900 74,000 92,200 7500 26,500 Credit 640,000 34,750 17,800 26,900 74,000 92,200 750 26,500
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