Question

Required information Problem 5-2A Record transactions related to credit sales and contra revenues (LO5-1, 5-2) [The following information applies to the questions displayed below.) Outdoor Expo provides guided fishing tours. The company charges $130 per person but offers a 10% discount to parties of four or more. Consider the following transactions during the month of May. May 2 Charlene books a fishing tour with Outdoor Expo for herself and four friends at the group discount price (5585 $117 x 5). The tour is scheduled for May 7. May 7 The fishing tour occurs. Outdoor Expo bills Charlene and offers discount terms of 4/15, n/30. May 9 Charlene is upset that no one caught a single fish and asks management for a discount. Outdoor Expo has a strict policy of no discounts related to number of fish caught. May 15 Upon deeper investigation, management of Outdoor Expo discovers that Charlene's tour was led by a new guide who did not take the group to some of the better fishing spots. In concession, management offers a sales allowance of 4ex of the amount due. May 20 Charlene pays for the tour after deducting the sales allowance.

Answer 1

Date	Accounting titles and Explanations	Debit	Credit
May 2	No Entry	-	-
	(Since no entry required for booking a tour )
May 7	Accounts receivable	$ 585
	Sales Revenue (or) Tour Revenue		$ 585
	(To record the Tour revenue )
May 9	No Entry
	(Since no entry required for tour Completion )
May 15	Sales Allowances ( $ 585 x 40% )	$ 234
	Accounts receivables		$ 234
	(Allowance recorded)
	(To record the Sales Allowances )
May 20	Cash - Bal. Fig.	$ 336.96
	Sales Discount ($ 351 x 4% )	$ 14.04
	Accounts receivables                        ($ 585 (-) $ 234 )		$ 351
	(To record the Sales remittance )