Pikes Peak 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 $640,000 from the bank on December 1, signing a note payable, due in six months. b. Purchased a new snowplow for $34,750 cash on December 31. c. Purchased ski supplies for $17,800 on account. d. Incurred $26,900 in routine maintenance expenses for the chairlifts; paid cash. e. Received $74,000 for season passes (beginning in the new year). fDaily lift passes were sold this month for a total of $92,200 cash. g. Received a $750 deposit on a townhouse to be rented for five days in January. h. Paid half the charges incurred on account in (c) /. Incurred and paid $26,500 in wages to employees for the month of December. Required: 1. Prepare accrual basis journal entries for each transaction. 2. Calculate the company's preliminary net income.

Pikes Peak 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 $640,000 from the bank on December 1, signing a note payable, due in six months. b. Purchased a new snowplow for $34,750 cash on December 31. c. Purchased ski supplies for $17,800 on account. d. Incurred $26,900 in routine maintenance expenses for the chairlifts; paid cash. e. Received $74,000 for season passes (beginning in the new year). fDaily lift passes were sold this month for a total of $92,200 cash. g. Received a $750 deposit on a townhouse to be rented for five days in January. h. Paid half the charges incurred on account in (c) /. Incurred and paid $26,500 in wages to employees for the month of December. Required: 1. Prepare accrual basis journal entries for each transaction. 2. Calculate the company's preliminary net income.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter2: Analyzing Transactions

Section: Chapter Questions

Problem 3PB: On October 1, 2019, Jay Pryor established an interior decorating business, Pioneer Designs. During...

See similar textbooks

Similar questions

In July of this year, M. Wallace established a business called Wallace Realty. The account headings are presented below. Transactions completed during the month follow. a. Wallace deposited 24,000 in a bank account in the name of the business. b. Paid the office rent for the current month, 650, Ck. No. 1000. c. Bought office supplies for cash, 375, Ck. No. 1001. d. Bought office equipment on account from Dellos Computers, 6,300. e. Received a bill from the City Crier for advertising, 455. f. Sold services for cash, 3,944. g. Paid on account to Dellos Computers, 1,500, Ck. No. 1002. h. Received and paid the bill for utilities, 340, Ck. No. 1003. i. Paid on account to the City Crier, 455, Ck. No. 1004. j. Paid truck expenses, 435, Ck. No. 1005. k. Wallace withdrew cash for personal use, 1,500, Ck. No. 1006. Required 1. Record the transactions and the balance after each transaction. 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.
On October 1, 2019, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business: Oct. 1. Jay transferred cash from a personal bank account to an account to be used for the business, 18,000. 4.Paid rent for period of October 4 to end of month, 3,000. 10.Purchased a used truck for 23,750, paying 3,750 cash and giving a note payable for the remainder. 13.Purchased equipment on account, 10,500. 14.Purchased supplies for cash, 2,100. 15.Paid annual premiums on property and casualty insurance, 3,600. 15.Received cash for job completed, 8,950. Enter the following transactions on Page 2 of the two-column journal: 21.Paid creditor a portion of the amount owed for equipment purchased on October 13, 2,000. 24.Recorded jobs completed on account and sent invoices to customers, 14,150. 26.Received an invoice for truck expenses, to be paid in November, 700. 27.Paid utilities expense, 2,240. 27.Paid miscellaneous expenses, 1,100. Oct. 29. Received cash from customers on account, 7,600. 30.Paid wages of employees, 4,800. 31.Withdrew cash for personal use, 3,500. Instructions 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. 2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. 3. Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 2019. 4. Determine the excess of revenues over expenses for October. 5. Can you think of any reason why the amount determined in (4) might not be the net income for October?
Donato Menorca was a service advisor in a car dealership. He supervised a team of mechanics that keeps and restores the customers’ cars to good operating condition. Tired of being an employee, he decided to put up Express Repair Shop. During the month of January 2020, Menorca completed the following transactions: Started his business by transferring Php 90,000 of his personal money to the business bank account; Paid rent for the month, Php 12,000; Purchased several equipment for Php 40,000; made a down payment of Php 20,000 and arranged to pay the balance the following month; Bought supplies for cash amounting to Php 6,000; Performed services amounting to Php 70,000 of which Php 40,000 was received in cash; Paid the following cash expenses: wages, Php 20,000; utilities, Php 6,000. REQUIRED: Use the following accounts: Cash; Accounts Receivable; Supplies; Equipment; Accounts Payable; D. Menorca, Capital; Service Revenue; Wages Expense; Rent Expense; Utilities Expense Record the…
Tom loves cooking and after attending culinary school, he decided to start his owneatery in downtown Vancouver in May. Since he did not receive formal business, hehas asked you to help him prepare monthly financial statements. He was able to collectall business receipt and financial records. The following are transactions for the monthof January 2022, the first month of operations.Jan 1 Tom invested his saving of $350,000 into business bank account at TD Bank andhe also borrowed &150,000 as 24 months bank loan.Jan 1 Signed lease contract and secured the locationJan 1 Purchased a one-year insurance policy for $24,000 in cash.Jan 2 Tom purchased kitchen equipment for $150,000 and $1000 kitchen suppliesincluding napkins and clean supplies in cashJan 1 he hired a soul chef and one receptionist. In contract, he will pay the soul chef$5,000 per month and receptionist $3,000 per monthJan 2 Tom purchased $100,000 furniture in cashJan 3 Tom hired a renovation company to do lease…
After several months of planning, Joane Cardinal started a haircutting business called “The Cutlery”. The following business activities occurred during it’s first month (June 2020) : On June 1st, Joane deposited $16,500 cash into a bank account of the organization On June 1st, purchased on credit tables & chairs (for the business) at TheBay store. Value $7,000 Rent office : $500 per month; paid cash Provided services to customers (on credit). Value $6,000 Purchased supplies, cash ($4,000). Paid 40% of the debt to “The Bay” store Provided services to customers. Value $3,400. 20% of the customers paid cash, 80% on credit. At the end of the month, Joane withdrew $400 cash for her personal use. Required  Prepare journal entries and T accounts  Produce Trial balance and Financial statements (3 usual statements)
After several months of planning, Joane Cardinal started a haircutting business called “The Cutlery”. The following business activities occurred during it’s first month (June 2020) : On June 1st, Joane deposited $16,500 cash into a bank account of the organization On June 1st, purchased on credit tables & chairs (for the business) at TheBay store. Value $7,000 Rent office : $500 per month; paid cash Provided services to customers (on credit). Value $6,000 Purchased supplies, cash ($4,000). Paid 40% of the debt to “The Bay” store Provided services to customers. Value $3,400. 20% of the customers paid cash, 80% on credit. At the end of the month, Joane withdrew $400 cash for her personal use. Required prepare the closing entries
Tom loves cooking and after attending culinary school, he decided to start his own eatery in downtown Vancouver in May. Since he did not receive formal business, he has asked you to help him prepare monthly financial statements. He was able to collect all business receipt and financial records. The following are transactions for the month of January 2022, the first month of operations. Jan 1 Tom invested his saving of $350,000 into business bank account at TD Bank and he also borrowed &150,000 as 24 months bank loan. Jan 1 Signed lease contract and secured the locationJan 1 Purchased a one-year insurance policy for $24,000 in cash. Jan 2 Tom purchased kitchen equipment for $150,000 and $1000 kitchen supplies including napkins and clean supplies in cash Jan 1 he hired a soul chef and one receptionist. In contract, he will pay the soul chef $5,000 per month and receptionist $3,000 per month Jan 2 Tom purchased $100,000 furniture in cash Jan 3 Tom hired a renovation company to do…
On April 5, Timothy established an interior decorating business, Tim’s Design, with a cash investment ofP200,000. Timothy completed the following transactions for April:6 Paid rent for the month, P8,000.7 Purchased from Delta Co. office equipment, P55,0008 Purchased a used car for P180,000, paying P80,000 cash and taking a bank loan for theremainder.10 Purchased supplies and materials for cash, P11,315.12 Received cash from Miss Laura for job completed in her condo, P57,500. Supplies were used upamounting to P8,250.20 Purchased materials and supplies on credit, P15,000.23 Recorded job completed for Ms. Ferrer. Term: on account 10 days, P14,950. Supplies were usedup amounting to P3,500.24 Received an invoice for repairs on car and paid P4,500.25 Paid utilities expense, P1,750.26 Paid P20,000 on the bank loan.27 Received cash from Ms. Ferrer, P10,000.28 Paid salary of worker, P5,00029 Paid Delta a portion of the amount owed for equipment, P5,000.30 Withdrew cash for personal use, P3,500.…
On April 5, Timothy established an interior decorating business, Tim’s Design, with a cash investment ofP200,000. Timothy completed the following transactions for April:6 Paid rent for the month, P8,000.7 Purchased from Delta Co. office equipment, P55,0008 Purchased a used car for P180,000, paying P80,000 cash and taking a bank loan for theremainder.10 Purchased supplies and materials for cash, P11,315.12 Received cash from Miss Laura for job completed in her condo, P57,500. Supplies were used upamounting to P8,250.20 Purchased materials and supplies on credit, P15,000.23 Recorded job completed for Ms. Ferrer. Term: on account 10 days, P14,950. Supplies were usedup amounting to P3,500.24 Received an invoice for repairs on car and paid P4,500.25 Paid utilities expense, P1,750.26 Paid P20,000 on the bank loan.27 Received cash from Ms. Ferrer, P10,000.28 Paid salary of worker, P5,00029 Paid Delta a portion of the amount owed for equipment, P5,000.30 Withdrew cash for personal use, P3,500.…
At the beginning of April, Haron Kadir launched a custom computer solutions company called Softworks. The company had the following transactions during April. April Haron Kadir invested $65,000 cash, office equipment with a value of $5,750, and $30,000 of computer equipment in the company. The company purchased land worth $22,000 for an office by paying $5,000 cash and signing a long-term note payable for $17,000. The company purchased a portable building with $34,500 cash and moved it onto the land acquired on date 2nd. The company paid $5,000 cash for the premium on a two-year insurance policy. The company provided services to a client and immediately collected $4,600 cash. The company purchased $4,500 of additional computer equipment by paying $800 cash and signing a long-term note payable for $3,700. The company completed $4,250 of services for a client. This amount is to be received within 30 days. The company purchased $950 of additional office equipment on credit. The company…
At the beginning of April, Haron Kadir launched a custom computer solutions company called Softworks. The company had the following transactions during April. April Haron Kadir invested $65,000 cash, office equipment with a value of $5,750, and $30,000 of computer equipment in the company. The company purchased land worth $22,000 for an office by paying $5,000 cash and signing a long-term note payable for $17,000. The company purchased a portable building with $34,500 cash and moved it onto the land acquired on date 2nd. The company paid $5,000 cash for the premium on a two-year insurance policy. The company provided services to a client and immediately collected $4,600 cash. The company purchased $4,500 of additional computer equipment by paying $800 cash and signing a long-term note payable for $3,700. The company completed $4,250 of services for a client. This amount is to be received within 30 days. The company purchased $950 of additional office equipment on credit. The company…
At the beginning of April, Haron Kadir launched a custom computer solutions company called Softworks. The company had the following transactions during April. April Haron Kadir invested $65,000 cash, office equipment with a value of $5,750, and $30,000 of computer equipment in the company. The company purchased land worth $22,000 for an office by paying $5,000 cash and signing a long-term note payable for $17,000. The company purchased a portable building with $34,500 cash and moved it onto the land acquired on date 2nd. The company paid $5,000 cash for the premium on a two-year insurance policy. The company provided services to a client and immediately collected $4,600 cash. The company purchased $4,500 of additional computer equipment by paying $800 cash and signing a long-term note payable for $3,700. The company completed $4,250 of services for a client. This amount is to be received within 30 days. The company purchased $950 of additional office equipment on credit. The company…