Question

Rocky Guide Service provides guided 1-5 day hiking tours throughout the Rocky Mountains. Wilderness Tours hires Rocky to lead various tours that Wilderness sells. Rocky receives $2,900 per tour day, and shortly after the end of each month Rocky learns whether it will receive a $290 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 $2,900 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 20% chance it will earn the bonus for July tours. It guided a total of 10 days from July 1-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 70% chance it would earn the bonus for July tours. Rocky also guided customers for 15 days from July 16-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: 1. to 3. Prepare the journal entries to record the transactions above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet > 1 2 3 Record Rocky's July 15 journal entry to record revenae for tours given from July 1- July 15 Nete: Enter debits before ceeds Date General Journal Debit Credit

Answer 1

Answer: " To 3) Journal entries. 1) Rocky's July 15 Journal entry to record revenue for tours - given from July, - July 15t Date particulars F Debit credit July-15 Account Receiueble ale $2.900x16] or $29.000 Bonus Receivable £290 xlox207.74% or $580 To Service Revence 1.329,580 (2) Rockys July-3, Journal eulty to record revenue for tours given from July 16- Julys). bate particulars LP Debit T credit July-2t Accocent Receivable [$2,900x15] Alcoy $43,500 Bonus Recewable All $4,495 290 (10+15)*702-4580 TO Service Revenue $47995 e Ale 3) Rocky's. Aug-5 Journal entry to record the receipt of - payment from wilderness. pate particulars LF Debit credit Augs cash ale £$ 29,000 + $ 43,5007 $ 72,500 TO Accounts Receivable $43.500 $72,500 (4) Rocks, Aug 5 Journal outry to record any necessary . adicestments to revence. credit Date particulars Service revenue Ale DY TO Bonus receivable $580+44495 & Debit $5075 $5,075