Ski West, Incorporated, operates a downhill ski area near Lake Tahoe, California. An all-day adult lift ticket can be purchased for $85. Adult customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typically runs from December 1 through April 30. Ski West expects its season pass holders to use their passes equally throughout the season. The company's fiscal year ends on December 31. On November 6, 2024, Ski West sells a season pass to Jake Lawson for $450. Required:What are the financial statement effects from the sale of the season pass on November 6, 2024?

Ski West, Incorporated, operates a downhill ski area near Lake Tahoe, California. An all-day adult lift ticket can be purchased for $85. Adult customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typically runs from December 1 through April 30. Ski West expects its season pass holders to use their passes equally throughout the season. The company's fiscal year ends on December 31. On November 6, 2024, Ski West sells a season pass to Jake Lawson for $450. Required:What are the financial statement effects from the sale of the season pass on November 6, 2024?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ski West, Incorporated, operates a downhill ski area near Lake Tahoe, California. An all-day adult lift ticket can be purchased for $85. Adult customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typically runs from December 1 through April 30. Ski West expects its season pass holders to use their passes equally throughout the season. The company’s fiscal year ends on December 31. On November 6, 2024, Jake Lawson purchased a season pass for $445. Required:When should Ski West recognize revenue from the sale of its season passes?Prepare the appropriate journal entries that Ski West would record on November 6 and December 31.What will be included in the Ski West 2024 income statement and balance sheet related to the sale of the season pass to Jake Lawson?
Indigo Corp. enters into a contract with a customer to build an apartment building for $1,061,800. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $139,200 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $46,400 each week that completion is delayed. Indigo commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by August 1, 2021 August 8, 2021 August 15, 2021 After August 15, 2021 Transaction Price Probability 70 % Transaction Price $ 20 6 (a) Determine the transaction price for the contract, assuming Indigo is only able to estimate whether the building can be completed by August 1, 2021, or not (Indigo estimates that there is a 70% chance that the building will be completed by August 1, 2021). (If answer is O, please enter O. Do not leave any fields blank.) 4 (b) Determine the…
The Bigelow Health Club sells annual memberships to a prestigious club. The terms of the contracts are that customers are required to pay an up-front non-refundable fee of $200, and then a monthly fee of $50, with the first month due immediately, for the year for a total cost of $800 to join the club. On February 1 2024 Bigelow sold 10 memberships. Prepare the journal entry for the sale on Feb 1 and the adjusting entry on Feb 29, 2024 to report revenue. Explain what revenue Bigelow will report in the month, and over the course of the year. Assume that 100% of the members of the Bigelow club renew their memberships for 3 years. How does that change the revenue reported in February?
Three programmers at Feenix Computer Storage, Inc., write an operating systems control manual for Hill-McGraw Publishing, Inc., for which Feenix receives royalties equal to 12% of net sales. Royalties are payable annually on February 1 for sales the previous year. The editor indicated to Feenix on December 31, 2021, that book sales subject to royalties for the year just ended are expected to be $300,000. Accordingly, Feenix accrued royalty revenue of $36,000 at December 31 and received royalties of $36,500 on February 1, 2022. What adjustments, if any, should be made to retained earnings or to the 2021 financial statements?
Cullumber Company sells goods to Riverbed Company during 2020. It offers Riverbed the following rebates based on total sales to Riverbed. If total sales to Riverbed are 9,000 units, it will grant arebate of 3%. If it sells up to 21.100 units, it will grant a rebate of 5%. If it sells up to 32,200 units, it will grant a rebate of 6%, In the first quarter of the year. Culumber sells 9,900 units to Riverbed at a sales price of $99,000. Cullumber, based on past experience, has sold over 36,200 units to Riverbed, and these sales normally take place in the third quarter of the year. What amount of revenue should Cullumber report for the sale of the 9,900 units in the first quarter of the year. Reverue eTextbook and Media List of Accounts Attempts: 0 of 3 used Submit Arawer Savefor Later
Veras Bus Transportation provides on-campus bus services for universities. On January 1, it enters into a one-year contract with Moose University to operate five bus lines traveling throughout the campus. Under the contract, Veras will be paid $110,000 on the last day of each month. In addition, Veras will receive an additional $130,000 at the end of each six-month period, provided it remains free of accidents. On January 1, based on historical experience, Veras estimated that there is a 70% chance that it will remain free of accidents for the entire year. On March 20, three of the most senior drivers at Veras abruptly left. As a result, Veras had to hire inexperienced drivers to fill the vacant positions. Consequently, Veras revised its estimate to a 30% chance that it would be entitled to receive the semiannual bonus and decided to continue this 30% probability estimate until its six-month review at the end of June. On June 30, Moose confirmed that there was no accident between…
Campus Cellular provides cell phones and 1 year of cell service to students for an upfront, nonrefundable fee of $300 and a usage fee of $5 per month. Students may renew the service without paying another upfront fee for each year they are on campus (on average, students renew their service one time). What amount of revenue should Campus Cellular recognize in the first year of the contract?
Accounting Beach Life Ltd. operates an online booking service restricted to beachfront properties around the world. Users of the company’s website booked beach rentals totalling $7,990,000 in 2020. Bookings are fully paid for at the time of reservation and are 50% refundable if the reservation is cancelled any time up to 21 days before the reservation date. After that date, the reservations are non-cancellable.Under the terms of the company’s listing agreements with property owners, Beach Life charges a fee of 10% of the total reservation and electronically transfers the balance of cash collected directly to the property owner’s bank five days before the reservation date.Of the 2020 bookings, 90% had been completed before Beach Life’s December 31 year end. The balance was still within the cancellation period.(a1) Determine how much revenue Beach Life would be able to recognize in 2020. Revenue recognized on 2020 $
On June 1, 2025, Oriole Company sells $185,000 of shelving units to a local retailer, Blue Spruce, which is planning to expand its stores in the area. Under the agreement, Blue Spruce asks Oriole to retain the shelving units at its factory until the new stores are ready for installation. Title passes to Blue Spruce at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2025, and Blue Spruce pays in full. Prepare the journal entries for this bill-and-hold arrangement (assuming that conditions for recognizing the sale as a bill-and-hold sale have been met) for Oriole on June 1 and September 1, 2025. The cost of the shelving units to Oriole is $89,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the…
Over the winter months, Pharoah Co. pre-sells fertilizing and weed control lawn services to be performed from May through September, inclusive. If payment is made in full by April 1, a 5% discount is allowed. In March, 275 customers took advantage of the discount and purchased the summer lawn service package for $760 each. In June, 225 customers purchased the package for $800, and in July, 84 purchased it for the same price. For customers who pay after May 1, service starts in the month the customer makes the payment. How much revenue should be recognized by the Pharoah Co. in each of the months of March, April, May, June, July, August, and September? (Round answers to 0 decimal places, e.g. 5,275. Do not leave any answer field blank. Enter O for amounts.) March $ April $ May $ June $ July August September $
Veras Bus Transportation provides on-campus bus services for universities. On January 1, it enters into a one-year contract with Moose University to operate five bus lines traveling throughout the campus. Under the contract, Veras will be paid $114,000 on the last day of each month. In addition, Veras will receive an additional $134,000 at the end of each six-month period, provided it remains free of accidents. • On January 1, based on historical experience, Veras estimated that there is a 75% chance that it will remain free of accidents for the entire year. • On March 20, three of the most senior drivers at Veras abruptly left. As a result, Veras had to hire inexperienced drivers to fill the vacant positions. Consequently, Veras revised its estimate to a 25% chance that it would be entitled to receive the semiannual bonus and decided to continue this 25% probability estimate until its six-month review at the end of June. ⚫ On June 30, Moose confirmed that there was no accident between…
Sheffield Marina has 300 available slips that rent for $900 per season. Payments must be made in full by the start of the boating season, April 1, 2021. The boating season ends October 31, and the marina has a December 31 year-end. Slips for future seasons may be reserved if paid for by December 31, 2021. Under a new policy, if payment for 2022 season slips is made by December 31, 2021, a 4% discount is allowed. If payment for 2023 season slips is made by December 31, 2021, renters get a 21% discount (this promotion hopefully will provide cash flow for major dock repairs).On December 31, 2020, all 300 slips for the 2021 season were rented at full price. On December 31, 2021, 213 slips were reserved and paid for the 2022 boating season, and 62 slips were reserved and paid for the 2023 boating season.(a) Prepare the appropriate journal entries for December 31, 2020, and December 31, 2021.