Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Rocky Guide Service provides guided 1 to 5 day hiking tours throughout the Rocky Mountains. Wilderness Tours hires Rocky to lead various tours that Wilderness

Rocky Guide Service provides guided 1 to 5 day hiking tours throughout the Rocky Mountains. Wilderness Tours hires Rocky to lead
various tours that Wilderness sells. Rocky receives $2,800 per tour day, and shortly after the end of each month, Rocky learns whether
it will receive a $280 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 $2,800 per day and any bonus due are paid in one lump payment shortly after
the end of each month.
On July 1, based on prior experience, Rocky estimated there is a 40% chance it will earn the bonus for July tours. It guided a total of
10 days from July 1 to July 15.
On July 16, based on Rocky's view that it had provided excellent service during the first part of the month, Rocky revised its estimate
to an 90% chance it would earn the bonus for all July tours. Rocky also guided customers for 15 days from July 16 to July 31.
On August 5, 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 15 journal entry to record revenue for tours given from July 1-July 15.
Prepare Rocky's July 31 journal entry to record revenue for tours given from July 16-July 31.
Prepare Rocky's August 5 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.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modernize Your Audit Department Five Critical Areas For Improvement

Authors: Toby DeRoche

1st Edition

B08FKW8B91, 979-8674160274

More Books

Students also viewed these Accounting questions

Question

Issue Presented: Is Van Tassell required to arbitrate her claims?

Answered: 1 week ago

Question

2. Describe how technology can impact intercultural interaction.

Answered: 1 week ago