The following information applies to the questions displayed below. Tony and Suz
ID: 2460208 • Letter: T
Question
The following information applies to the questions displayed below. Tony and Suzie are ready to expand Great Adventures even further in 2016. Tony believes that many groups in the community (for example, Boy Scouts, church groups, civic groups, and local businesses) would like to hold one-day outings for their members. Groups would engage in outdoor activities such as rock climbing, fishing, capture the flag, paintball, treasure hunts, scavenger hunts, nature hikes, and so on. The purpose of these one-day events would be for each member of the group to learn the importance of TEAM (Together Everyone Achieves More). Tony knows that most people are not familiar with these types of activities, so to encourage business he allows groups to participate in the event before paying. He offers a 6% quick-payment discount to those that pay within 10 days after the event. He also guarantees that at least eight hours of outdoor activities will be provided or the customer will receive a 20% discount. For the first six months of the year, the following activities occur for TEAM operations. Jan. 24 Great Adventures purchases outdoor gear such as ropes, helmets, harnesses, compasses, and other miscellaneous equipment for $5,500 cash. Feb. 25 Mr. Kendall's Boy Scout troop participates in a one-day TEAM adventure. Normally, Tony would charge a group of this size $4,000, but he wants to encourage kids to exercise more and enjoy the outdoors so he charges the group only $3,500. Great Adventure provides these services on account. Feb. 28 The Boy Scout troop pays the full amount owed, less the 6% quick-payment discount. Mar. 19 Reynold's Management has its employees participate in a one-day TEAM adventure. Great Adventures provides services on account for $4,500, and Reynold's agrees to pay within 30 days. Mar. 27 Reynold's pays the full amount owed, less the 6% quick-payment discount. Apr. 7 Several men from the Elks Lodge decide to participate in a TEAM adventure. They pay $8,000, and the event is scheduled for the following week. Apr. 14 The TEAM adventure is held for members of the Elks Lodge. May 9 Myers Manufacturing participates in a TEAM adventure. Great Adventures provides services on account for $6,500, and Myers agrees to pay within 30 days. Jun. 1-30 Several MBA groups participate in TEAM adventures during June. Great Adventures provides services on account for $26,500 to these groups, with payment due in July. Jun. 30 Myers Manufacturing fails to pay the amount owed within the specified period and agrees to sign a three-month, 9% note receivable to replace the existing account receivable. Required:. Record TEAM adventure transactions occurring during the first six months of 2016.Explanation / Answer
24 january
Equipment A/c dr. $5500
To Cash A/c cr. $5500
25 Feb
Accounts Receivable A/c Dr. $3500
To Service Revenue A/c cr. $3500
28 Feb
Cash A/c dr. $3290
Sales Discount A/ c Dr. $210
To Accounts Receivable A/c cr. $3500
19 March
Accounts Receivable A/c Dr. $4500
To Service Revenue A/c cr. $4500
27 March
Cash A/c dr. $4230
Sales Discount A/ c Dr. $270
To Accounts Receivable A/c cr. $4500
7 April
Cash A/c dr. $8000
To Unearned Revenue A/c cr. $8000
14 April
Unearned Revenue A/c dr. $8000
To Service Revenue A/c cr. $8000
9 May
Accounts Receivable A/c Dr. $6500
To Service Revenue A/c cr. $6500
1-30June
Accounts Receivable A/c Dr. $26500
To Service Revenue A/c cr. $26500
30 June
9% Notes Receivable A/c dr. $6500
To Account Receivable A/c cr. $6500
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