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 $3,000 per tour day, and shortly after the end of each month Rocky learns whether it will receive a $300 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 $3,000 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 that there is a 30% chance it will earn the bonus for July tours. It guided a total of 1O days from July 1-July 15 to an 80% chance it would earn the bonus for July tours. Rocky also guided customers for 15 days from July 16-July 31 bonus for July, and received all payment due for the July tours 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 .On August 5 Rocky learned that it did not receive an average evaluation of "excellent" for its July tours, so it would not receive any 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 2 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 General Journal Debit Credit July 15 Journal entry worksheet 4 Prepare Rocky's July 31 journal entry to record revenue for tours given from July 16- July 31 and any adjustment needed for July 1-July 15 Note: Enter debits before credits. Date General Journal Debit Credit July 31 Journal entry worksheet 4 Prepare Rocky's August 5 journal entry to record the receipt of payment from Wilderness. Note: Enter debits before credits. Date General Journal Debit Credit August 05 Journal entry worksheet 4 Prepare Rocky's August 5 journal entry to record any necessary adjustments to revenue. Note: Enter debits before credits. Date General Journal Debit Credit August 05

Answer 1

Rocky Guide Service Journal Eteries Date Particulars Debit in $ Credit in $ Jul-15 Accounts Receivable a/c Dr 30000 To Service Revenue 30000 (Services performed on account) 3000 x 10 30000 Jul-31 Accounts Receivable a/c Dr 45000 7500 To Service Revenue (Services performed on account) 3000 x 10 30000 3000 x 15 45000 300 x (10+15) 7500 52500 Aug-05 Cash a/c 75000 To Accounts Receivable 75000 Cash received from debtors) Aug-05 Service Revenue a/c 7500 To Bonus Receivable (Bonus revenue reversed) 7500