23.03.2023 - 19:23

Vail Resorts, Inc. owns and operates five premier year-round ski resort properties (Vail Mountain. Vail Resorts Inc Beaver Creek Resort. Breckenridge Mountain, and Keystone Resort, all located in the Colorado Rocky Mountains, and Heavenly Valley Mountain

Vail Resorts, Inc. owns and operates five premier year-round ski resort properties (Vail Mountain. Vail Resorts Inc Beaver Creek Resort. Breckenridge Mountain, and Keystone Resort, all located in the Colorado Rocky Mountains, and Heavenly Valley Mountain Resort, located in the Lake Tahoe area of California/Nevada). The company also owns a collection of luxury hotels, resorts, and lodging properties. The company sells lift tickets, ski lessons, and ski equipment. The following hypothetical December transactions are typical of those that occur at the resorts.

a. Borrowed $2,500,000 from the bank on December 1, signing a note payable due in six months.

b. Purchased a new snowplow for $95,000 cash on December 31.

c. Purchased ski equipment inventory for $40.000 on account to sell in the ski shops.

d. Incurred $62,000 in routine maintenance expenses for the chairlifts; paid cash.

e. Sold $372,000 of January through March season passes and received cash.

f. Sold a pair of skis from a ski shop to a customer for $750 on the account. (The cost of the skis was $450.)

g. Sold daily lift passes in December for a total of $270,000 in cash.

h. Received a $3,200 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 $258,000 in wages to employees for the month of December.

Prepare journal entries for each transaction.

Answers (1)
  • artem-potemkin
    April 6, 2023 в 10:26

    Sure, here are the journal entries for each of the transactions:

    a. To record the borrowing of $2,500,000 from the bank:

    Cash 2,500,000 Notes Payable 2,500,000

    b. To record the purchase of a new snowplow for $95,000 in cash:

    Snowplow 95,000 Cash 95,000

    c. To record the purchase of ski equipment inventory for $40,000 on account:

    Inventory 40,000 Accounts Payable 40,000

    d. To record the payment of $62,000 in cash for routine maintenance expenses:

    Maintenance Expenses 62,000 Cash 62,000

    e. To record the receipt of $372,000 in cash for the sale of season passes:

    Cash 372,000 Unearned Revenue 372,000

    (f) To record the sale of a pair of skis on account for $750, with a cost of $450:

    Accounts Receivable 750 Sales Revenue 750 Cost of Goods Sold 450 Inventory 450

    (g) To record the receipt of $270,000 in cash for the sale of daily lift passes:

    Cash 270,000 Unearned Revenue 270,000

    (h) To record the receipt of a $3,200 deposit on a townhouse rental:

    Cash 3,200 Unearned Revenue 3,200

    (i) To record the payment of half the charges incurred on account for the purchase of ski equipment inventory:

    Accounts Payable 20,000 Cash 20,000

    (j) To record the receipt of $400 on account from the customer who purchased skis:

    Cash 400 Accounts Receivable 400

    (k) To record the payment of $258,000 in wages to employees for the month of December:

    Wages Expense 258,000 Cash 258,000

    These journal entries help to track the various transactions that occur at the Vail Resorts properties and allow the company to keep accurate financial records.

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