Business
Engineering
Math
Science
Social Science
Intermediate Accounting: Reporting...
Solutions
Intermediate Accounting: Reporting...
Magical Memories sells Florida theme park vacation packages to various customers throughout the United States. Magical Memories receives a 5% commission based on the total price of the vacation package. A customer purchased the Deluxe Package valued at $15,000. Prepare Magical Memories’s journal entries to record sale of the vacation package, the receipt of cash from the customer, and the remittance to the theme park.
Journalize entries to record the sale of the vacation package, the receipt of cash from the customer and the remittance to the theme park.
Contract: Contract is an agreement among two parties or more parties which includes enforceable obligations and rights. A contract can be “written oral or implied” by ordinary business practices.
Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.
Accounting rules for Journal entries:
- To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
- To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.
Prepare journal entry to record the sale of the vacation package to the customer:
| Date | Account title and explanation | Debit ($) | Credit ($) |
| Accounts receivable | 15,000 | ||
| Sales revenue (1) | 750 | ||
| Payable to principal (Balancing figure) | 14,250 | ||
| (To record sale of the vacation package) |
Table (1)
- Accounts receivable is an asset and it is increased. Therefore, debit accounts receivable account by $15,000.
- Sales revenue is a component of stockholders’ equity and it is increased. Therefore, credit sales revenue account by $750.
- Payable to principal is a liability and it is increased. Therefore, credit payable to principal account by $14,250.
Prepare journal entry to record the receipt of cash from the customer:
| Date | Account title and explanation | Debit ($) | Credit ($) |
| Cash | 15,000 | ||
| Accounts receivable | 15,000 | ||
| (To record receipt of cash) |
Table (2)
- Cash is an asset and it is increased...
Chapter 17 Solutions
Additional Business Solutions
Find more solutions based on key concepts
Show solutions addJOURNALIZING SALES TRANSACTIONS Enter the following transactions in a sales journal. Use a 6% sales tax rate. M...
College Accounting, Chapters 1-27
Analyze Wal-Mart The following data (in millions) arc taken from the financial statements of Wal-Mart Stores, I...
Corporate Financial Accounting
Steps in the accounting cycle Rearrange the following steps in the accounting cycle in proper sequence: a. A po...
Financial And Managerial Accounting
In the cost formula, the term 12,000 a. is the variable rate. b. is the dependent variable. c. is the independe...
Managerial Accounting: The Cornerstone of Business Decision-Making
Financial data for Otto Company follow: a. Compute the ratio of cash to monthly cash expenses. b. Interpret t...
Financial Accounting
Entries for uncollectible accounts, using direct write-off method Journalize the following transactions in the ...
Financial & Managerial Accounting
BIG BANG VERSUS PHASED-IN APPROACH The Nevada Department of Motor Vehicles (DMV) is the agency responsible for ...
Accounting Information Systems
What are the main characteristics of a competitive market?
Principles of Economics (MindTap Course List)
What factors distinguish DSS from EIS?
Accounting Information Systems
For a stock to be in equilibrium, what two conditions must hold?
Fundamentals of Financial Management (MindTap Course List)
Discuss the role of relationship marketing and strategic alliances in business marketing
MKTG 12:STUDENT ED.-TEXT
For each of the following questions, circle the answer that best describes you. If you stay in a household run ...
Management, Loose-Leaf Version
Give three examples of important trade-offs that you face in your life.
Principles of Microeconomics (MindTap Course List)
INSTRUCTOR: Visit the Instructor Companion Website for lecture notes, solutions, discussion guides, and other r...
Essentials of Business Communication (MindTap Course List)
Suppose that a textile workers union encourages people to buy only American-made clothes. What would this polic...
Principles of Macroeconomics (MindTap Course List)
Contrast the focus of marketing activities during the five eras of marketing history.
Contemporary Marketing
(Household Production) What factors does a householder consider when deciding whether to produce a good or serv...
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
The following data show the number of rental cars in service for three rental car companies: Hertz, Avis, and D...
STATISTICS F/BUSINESS+ECONOMICS-TEXT
With the economy in a recession because of inadequate aggregate demand, the government increases its purchases ...
Brief Principles of Macroeconomics (MindTap Course List)
Why do economists oppose policies that restrict trade among nations?
Essentials of Economics (MindTap Course List)
How can the government encourage the ethical behavior of organizations?
Foundations of Business (MindTap Course List)
If the euro depredates against the U.S. dollar, can a dollar bay more or fewer euros as a result? Explain.
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
A portion of Johnsons Farm Supply work sheet for the year ended December 31 follows: Required 1. Determine the ...
College Accounting (Book Only): A Career Approach
Effects of errors on financial statements For a recent period, the balance sheet for Costco Wholesale Corporati...
Financial & Managerial Accounting
The following selected transactions were completed during August between Summit Company and Beartooth Co.: Inst...
Financial Accounting
M. Parish purchased supplies on credit. What is the impact on the accounting equation? a. Increase Supplies and...
College Accounting (Book Only): A Career Approach
Complete accounting cycle For the past several years, Steffy Lopez has operated a part-time consulting business...
Accounting (Text Only)
ADJUSTMENT FOR SUPPLIES On December 31, the trial balance indicates that the supplies account has a balance, pr...
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Define nominal exchange rate and real exchange rate, and explain how they are related. If the nominal exchange...
Principles of Macroeconomics (MindTap Course List)
The Kroger Company is one of the largest grocery retailers in the United States, with over 2000 grocery stores ...
Statistics for Business & Economics, Revised (MindTap Course List)
Use supply and demand curves to show a. simultaneous increases in supply and demand, with a large increase in s...
Exploring Economics
What is the billing/accounts receivable/cash receipts (B/AR/CR) process?
Pkg Acc Infor Systems MS VISIO CD
Suppose you owned a portfolio consisting of 250,000 of long-term U.S. government bonds. a. Would your portfolio...
Fundamentals of Financial Management (MindTap Course List)
CASH CONVERSION CYCLE Christie Corporation is trying to determine the effect of its inventory turnover ratio an...
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Instead of being classified as an employee, Matthew McGinnis was misclassified as an independent contractor. Ho...
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Issuing par stock On January 29. Quality Marble Inc.. a marble contractor, issued 75.000 shares of $10 par comm...
Survey of Accounting (Accounting I)
Why are deductions from employees earnings classified as liabilities for the employer?
Corporate Financial Accounting
Give a numerical example to show that as marginal physical product (MPP) rises, marginal cost (MC) falls.
Economics (MindTap Course List)
Using numbers, explain how a market demand curve is derived from two individual demand curves.
Macroeconomics
Giant Motor Company This case deals with strategic planning issues for a large company. The main issue is plann...
Practical Management Science
Janice decides to go out on a date with Kyle instead of Robert. Do you think Janice is using some kind of ratio...
Microeconomics
Paper Products Division produces paper diapers, napkins, and paper towels. The divisional manager has decided t...
Cornerstones of Cost Management (Cornerstones Series)
If each time production volume doubled and cumulative average direct-labor requirements decreased by 5 percent,...
Purchasing and Supply Chain Management
