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Exercise 5 - ACCOUNTING Exercise 5 Six Flags 1 ECONOMIC...

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1 ACCOUNTING Exercise 5 Six Flags
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2 ECONOMIC EVENTS 1. Build theme park rides. The bank pays the $100,000,000 construction costs. Sign a 10%, five year note payable with the bank 2. Pay $1,000,000 for park supplies to be used over the next two years. 3. Pay $600,000 for a three year liability insurance policy. 4. Receive $1,000,000 from theme park guests for season passes. 5. Receive a $200,000 invoice for advertising from the advertising agency. 6. Pay $500,000 for food to be sold at theme park restaurants. 7. Receive $14,000,000 cash from park guests for one day admissions. 8. Other park guests charge $2,000,000 for one day admissions on Visa/MasterCard. Credit card companies charge a 6% fee. 9. Receive $1,000,000 for park food sales. 10. Record $200,000 for park food Cost of Sales. 11. Receive $100,000 invoice for attorney services. 12. Pay $500,000 for park landscaping. 13. Pay $2,000,000 for salaries.
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3 ECONOMIC EVENTS 14. Pay $200,000 to register patent design of theme rides. 15. Pay $500,000 for flood damage (first flood ever). 16. End of year. Record usage of $300,000 of park supplies. 17. End of year. Write off one year of prepaid insurance. 18. End of year. Record depreciation on the theme park rides (20 year lives). 19. End of year. Record amortization on the patent (20 year life). 20. End of year. Accrue interest on the note payable. 21. End of year. Recognize all the season pass revenue. 22. End of year. Accrue $400,000 for salaries. 23. Transfer 1,530,000 Net Loss to Retained Earnings.
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4 JOURNAL ENTRIES 1. 2. 3. 4. 5.
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5 JOURNAL ENTRIES 6. 7. 8. 9. 10.
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6 JOURNAL ENTRIES 11. 12. 13. 14. 15.
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7 JOURNAL ENTRIES 16. 17. 18. 19. 20.
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8 JOURNAL ENTRIES 21. 22. 23. 24. 25.
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9 Cash Reference Transaction Current Balance Debit Credit Debit Credit 200,000,000 200,000,000
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10 Common Stock Reference Transaction Current Balance Debit Credit Debit Credit 50,000,000 50,000,000
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11 Paid in Capital Reference Transaction Current Balance Debit Credit Debit Credit 100,000,000 100,000,000
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12 Retained Earnings Reference Transaction Current Balance Debit Credit Debit Credit 50,000,000 50,000,000
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13 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
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14 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
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15 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
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16 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
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17 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
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18 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
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19 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
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20 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit
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