Tony and Suzie are ready to expand Great Adventures even further in 2013. Tony b

Question

Tony and Suzie are ready to expand Great Adventures even further in 2013. Tony believes that many groups in the community (for example, Boy Scouts, church groups, civic groups, and local businesses) would like to hold one-day outings for their members. Groups would engage in outdoor activities such as rock climbing, fishing, capture the flag, paintball, treasure hunts, scavenger hunts, nature hikes, and so on. The purpose of these one-day events would be for each member of the group to learn the importance of TEAM (Together Everyone Achieves More). Tony knows that most people are not familiar with these types of activities, so to encourage business he allows groups to participate in the event before paying. He offers a 5% quick-payment discount to those that pay within 10 days after the event. He also guarantees that at least eight hours of outdoor activities will be provided or the customer will receive a 19% discount. For the first six months of the year, the following activities occur for TEAM operations. Jan.24 Great Adventures purchases outdoor gear such as ropes, helmets, harnesses, compasses, and other miscellaneous equipment for $5,000 cash. Feb.25 Mr. Kendall

Explanation / Answer

Jan. 24 Eqpt Dr 5000 Cash Cr 5000 Feb. 25 Act Rxable Dr 4000 Service Rev Cr 4000 Feb. 28 Cash Dr 3800 Sales Disc Dr 200 Acct Rxable Cr 4000 (5% QUick payment Disc = 4000*(1-5%) = 3800 ) Mar. 19 Acct Rxable Dr 3100 Service Rev Cr 3100 Mar. 27 Cash Dr 2945 Sales Disc Dr 155 Acct Rxable Cr 3100 (5% QUick payment Disc = 3100*(1-5%) =$2945) Apr. 7 Cash Dr 8400 Unearned Rev Cr 8400 Apr. 14 Unearned Rev Dr 8400 Service Rev Cr 8400 May 9 Acct Rxable Dr 5700 Services Rev Cr 5700 Jun. 1-30 Acct Rxable Dr24100 Servce Rev Cr 24100 Jun. 30 Note Rxable Dr 5700 Acct Rxable Cr 5700

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