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 $1,000 per tour day, and shortly after the end of each month Rocky learns whether it will receive a $100 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 $1,000 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 30% 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 80% 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 expected value 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 4 > Prepare Rocky's July 15 journal entry to record revenue for tours given from July 1 - July 15. Note: Enter debits before credits. Date Debit Credit July 15 General Journal Accounts receivable Deferred revenue Record entry Clear entry View general journal

Answer 1

Solution:
	Journa entries
Date	Accounts titles and Explanation	Debit	Credit
15-Jul	Accounts receivable ($1,000*10 days )	$10,000
	Bonus Receivable ($100*10*30%)	$300
	Service Revenue		$10,300
	(Being Service revenue recorded)
31-Jul	Accounts receivable ($1,000*15 days )	$15,000
	Bonus Receivable ($100*15*80%) + ($100 * 5 )	$1,700
	Service Revenue		$16,700
	(Being Service revenue recorded)
5-Aug	Cash (1,000*25 days )	$25,000
	Accounts Receivable		$25,000
	(Being cash received against service revenue)
5-Aug	Service revenue ($300+$1,700)	$2,000
	Bonus receivable		$2,000
	(Being entry reversed)
	Please upvote , if found the answer useful.
	For any clarification, Feel free to reach at comment Section