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Exercise 6 - 1 0 ( Algo ) Variable consideration - most likely amount; change in estimate [ LO 6 - 3 , 6 6
Exercise Algo Variable consideration most likely amount; change in estimate LO
Rocky Guide Service providesguided to day hiking tours throughout the Rocky Mountains. Wilderness Tours hires
Rocky to lead various tours tht Wilderness sells. Rocky receives $ per tour day, and shortly after the end of each
month, Rocky learns whether it will receive a $ bonus per tour day it guided during the previous month if its service
during that month received an average evaluation of "excellent" by Wilderness customers. The $ per day and any
bonus due are paid in one lump payment shortly after the end of each month.
On July based on prior experience, Rocky estimated there is a chance it will earn the bonus for July tours. It
guided a total of days from July to July
On July based on Rocky's view that it had provided excellent service during the first part of the month, Rocky revised
its estimate to an chance it would earn the bonus for all July tours. Rocky also guided customers for days from
July to July
On August Rocky learned it did not receive an average evaluation of "excellent" for its July tours, so it would not
receive any bonus for July, and received all payment due for the July tours.
Rocky bases estimates of variable consideration on the most likely amount it expects to receive.
Required:
Prepare Rocky's July journal entry to record revenue for tours given from July July
Prepare Rocky's July journal entry to record revenue for tours given from July July
Prepare Rocky's August journal entry to record any necessary adjustments to revenue and receipt of payment from
Wilderness.
Note: If no entry is required on a specific date, select No journal entry required" in the first account field.
Required:
Prepare Rocky's July journal entry to record revenue for tours given from July July
Prepare Rocky's July journal entry to record revenue for tours given from July July
Prepare Rocky's August journal entry to record any necessary adjustments to revenue and receipt of payment from Wild
Note: If no entry is required on a specific date, select No journal entry required" in the first account field.
Answer is not complete.
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