HW3 - P5-2AOutdoor Expo provides guided fishing tours. The...

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Unformatted text preview: P5-2AOutdoor Expo provides guided fishing tours. The company charges $200 per person but offers a 10% discount to parties of four or more. Consider the following transactions during the month of May. May 2 Charlene books a fishing tour with Outdoor Expo for herself and four friends at the group discount price ($900 = $180 5). The tour is scheduled for May 7. May 7 The fishing tour occurs. Outdoor Expo asks that payment be made within 30 days of the tour and offers a 5% discount for payment within 15 days. May 9 Charlene is upset that no one caught a single fish and asks management for a discount. Outdoor Expo has a strict policy of no discounts related to number of fish caught. May 15 Upon deeper investigation, management of Outdoor Expo discovers that Charlene's tour was led by a new guide who did not take the group to some of the better fishing spots. In concession, management offers a sales allowance of 40% of the amount due. May 20 Charlene pays for the tour after deducting the sales allowance. Required:1. Record the necessary transaction(s) for Outdoor Expo on each date.Solution May 2 Debit Credit No entry May 7 Accounts Receivable 900 Tour Revenue 900 (Provide guided tour on account)May 9 No entry May 15 Sales Allowances 360 Accounts Receivable 360 (Sales allowance for services on account)May 20 Cash 513 Sales Discounts 27 Accounts Receivable 540 (Receive cash on account) (Sales discount = $540 x 5%)P5-3BThe following events occur for Morris Engineering during 2012 and 2013, its first two years of operations. February 2, 2012 Provide services to customers on account for $32,000. July 23, 2012 Receive $22,000 from customers on account. December 31, 2012 Estimate that 30% of uncollected accounts will not be received. April 12, 2013 Provide services to customers on account for $45,000. June 28, 2013 Receive $6,000 from customers for services provided in 2012....
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HW3 - P5-2AOutdoor Expo provides guided fishing tours. The...

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