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Chapter_3__solution

# Chapter_3__solution - Homework#3 Chapter 3 Homework...

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Homework #3 Chapter 3 Homework Problems E3-8 Recording Journal Entries LO4 Vail Resorts Incorporated 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 \$470,000 from the bank on December 1, signing a short-term note payable due in six months. b. Purchased a new snow plow for \$19,550 cash on December 31. c. Purchased ski equipment inventory for \$9,458 on account to sell in the ski shop. d. Incurred \$17,300 in routine maintenance expenses for the chair lifts; paid cash. e. Sold \$65,000 of season passes and received cash. f. Sold daily lift passes for a total of \$69,000 in cash. g. Sold a pair of skis from the ski shop to a customer for \$262 on account. (The cost of the skis was \$233.) h. Received a \$320 deposit on a townhouse to be rented for five days in January. i. Paid half the charges incurred on account in (c). j. Received \$170 on account from the customer in (g). k. Paid \$95,000 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 \$1,200 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 ). 1. General Journal Debit Credit a. Cash 470,000 Short-term notes payable 470,000 b. Equipment 19,550 Cash 19,550 c. Merchandise inventory 9,458 Accounts payable 9,458

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d. Repair and maintenance expense 17,300 Cash 17,300 e. Cash 65,000 Unearned pass revenue 65,000 f. Cash 69,000 Lift revenue 69,000 g. Accounts receivable 262 Ski shop sales revenue 262 Cost of goods sold 233 Merchandise inventory 233 h. Cash 320 Unearned rent revenue 320 i. Accounts payable 4,729 Cash 4,729 j. Cash 170 Accounts receivable 170 k. Wages expense 95,000 Cash 95,000 2. Accounts Receivable ending balance \$ 1,292.
P3-1 Recording Nonquantitative Journal Entries (AP3-1) LO4 The following list includes a series of accounts for Choudhury Corporation that has been operating for three years. These accounts are listed and numbered for

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