Answered step by step
Verified Expert Solution
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 to day hiking tours throughout the Rocky Mountains. Wilderness Tours hires Rocky to lead
various tours that 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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started