Vail Resorts, Inc., owns and operates 11 premier year-round ski resort properties (located in the Colorado Rocky Mountains, the Lake Tahoe area, the upper midwest, Vermont, and Australia). The company also owns a collection of luxury hotels, resorts, and lodging properties. The company sells lift tickets, ski lessons, and ski equipment. The following hypothetical December transactions are typical of those that occur at the resorts. a. Borrowed $3,000,000 from the bank on December 1, signing a note payable due in six months.
b. Purchased a new snowplow for $90,000 cash on December 31.
c. Purchased ski equipment inventory for $37,000 on account to sell in the ski shops.
d. Incurred $59,000 in routine repairs expense for the chairlifts; paid cash.
e. Sold $368,000 of January through March season passes and received cash.
f. Sold a pair of skis from inventory in a ski shop to a customer for $570 on account. (The cost of the skis was $310). (Hint: Record two entries.)
g. Sold daily lift passes in December for a total of $273,000 in cash.
h. Received a $2,200 deposit on a townhouse to be rented for five days in January.
i. Paid half the charges incurred on account in (c).
j. Received $470 on account from the customer in (f).
k. Paid $263,000 in wages to employees for the month of December.

Required:
a. Prepare journal entries for each transaction. (Remember to check that debits equal credits and that the accounting equation is in balance after each transaction.)
b. Assume that ending balance in the Accounts Receivable account at the end of December based on transaction (A) through (K).

Solution :

Transaction     The General Journal          Debit                       Cash

1         a                    Cash                         3,000,000

                         Notes payable                                                3,000,000

2        b                   Equipment                90,000

                                 Cash                                                          90,000

3        c                  Inventory                   37,000

                         Accounts payable                                               37,000

4       d               Repair expense           59,000

                              Cash                                                              59,000

5        e                    Cash                       368,000

                  Unearned pass revenue                                        368,000

6      f(1)            Accounts receivable       570

                      Ski shop sales revenue                                           570

7        f(2)        Cost of goods sold             310

                              Inventory                                                           310

8           g               Cash                        273,000

                       Lift pass revenue                                                 273,000

9          h                cash                           2,200

                     Unearned rent revenue                                         2,200

10           i            Accounts Payable       18500

                         Cash (37,000/2)                                                  18500

11            j              Cash                           470

                          Accounts receivable                                             470

12            k        Salaries expense         263,000

                           Cash                                                                  263,000

The accounts receivable balance  = 1000 + 570 - 310

                                                         = 1260          

answergoing to the symphony;