Ski West, Inc., operates a downhill ski area near Lake Tahoe, California. An all-day adult lift ticket can be purchased for $85. Adulit customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typically runs from December 1 through April 30. Ski West expects its season pass holders to use their passes equally throughout the season. The company's fiscal year ends on December 31. On November 6, 2018, Jake Lawson purchased a season pass for $450.1. What will be included in the Ski West 2018 Income statement and balance sheet related to the sale of the season pass to Jake Lawson? Complete this question by entering your answers in the tabs below. 2. When should Ski West recognize revenue from the sale of its season passes?3. Prepare the appropriate ournal enteries that Sky West would record on November 6 and December 31.

Answers

Answer 1

Answer:

Answer:

Ski West, Inc.

1. What Ski West 2018 should include in its Income statement and balance sheet related to the sale of the season pass to Jake Lawson?

a) Income Statement:

Season Passes Revenue = $90 ($450/5). This represents December season pass by Jake Lawson.

b) Balance Sheet:

Unearned Season Passes Revenue $360 as a current liability.

2. When Ski West should recognize revenue from the sale of its season passes:

Revenue should be recognized on December 31.

3. Journal Entries on November 6 and December 31:

November 6:

Debit Cash Account $450

Credit Unearned Season Passes Revenue $450

To record the receipt from Jake Lawson.

If this sale was on account, then the Accounts Receivable is debited instead.

December 31:

Debit Unearned Season Passes Revenue $90

Credit Season Passes Revenue $90

To record the earned revenue from Jake Lawson's.

Explanation:

Unearned revenue is not recognized in the income statement. It is taken to the Balance Sheet as a current liability. It is not recognized because it does not belong to the current period, as specified by the accrual concept and matching principle.

Related Questions

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The Delta Co. owns retail stores that market home building supplies. Largo, Inc. builds single family homes in residential developments. Delta has a beta of 1.22 and Largo has a beta of 1.34. The riskminus free rate of return is 4 percent and the market risk premium is 6.5 percent. What should Delta use as their cost of equity if they decide to purchase some land and create a new residential community?

Answers

Answer:

12.71%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 4% + 1.34 × 6.5%

= 4% + 8.71%

= 12.71%

The (Market rate of return - Risk-free rate of return) is also called market risk premium and the same is used in the computation part. We ignored the bets of Delta

Workplace technology is relied upon by businesses to increase _____________. Employee turnover Philanthropy Efficiency and effectiveness Malfunction and futility

Answers

Answer:

Workplace technology is relied upon by businesses to increase _____________.

Efficiency and effectiveness

Explanation:

Workplace technology including the use of computer systems, internet, and other communication and information devices has propelled manufacturing and eased communication. Technology has exponentially improved the rate of production and speed at which business occurs. Technology in the workplace has helped factory and administrative workers to become more efficient than ever before with the automation of the many processes. As efficiency is increased, so has effectiveness in the production of desired results been improved tremendously. For instance, a process or set of processes that used to take hours now can take only minutes.

Each of the following factors affects the weighted average cost of capital (WACC) equation. Which are factors that a firm can control? Check all that apply. The firm’s capital budgeting decision rules
The firm’s capital structure Tax rates
The general level of stock prices

Answers

Answer:

The firm’s capital budgeting decision rules

The firm’s capital structure.

Explanation:

Capital budgeting is a term used to describe the proposed amount which a company has decided to set aside in the fort coming year to be spent on infrastructures or capital projects.

An organisation has the power to control its Capital budget, it also has the power to control its decision rules and it Capital structures (the contents of a company's capital spending).

A FIRM CAN NOT CONTROL THE TAX RATES AND THE GENERAL LEVEL OF STOCK PRICE WHICH ARE CONTROLLED BY GOVERNMENT AND EXTERNAL FORCES.

You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million dollars. Your plan is to deposit $30,800 at the end of each year for the next 11 years. You expect to earn 7 percent each year. Required: 1. Determine how much you will have saved after 11 years. 2. Determine the amount saved if you were able to deposit $33,300 each year. 3. Determine the amount saved if you deposit $30,800 each year, but with 11 percent interest.

Answers

Answer:

1. $486,134.86

2. $525,593.86

3. $602,492.04

Explanation:

You need to use the formula to calculate the future value of a constant annual deposit:

$Future\text{ }value=Deposit* \bigg[((1+r)^n-1)/(r)\bigg]$

Where r is the expected percent return, and n the number of years.

1. For a deposit of $30,800 at the end of each year for the next 11 years, with 7% interest.

You will have saved:

$Future\text{ }value=\$ 30,800* \bigg[((1+0.07)^(11)-1)/(0.07)\bigg]$

$Future\text{ }value=\$ 30,800* 15.7835993=\$486,134.86$

2. For a deposit of $33,300 each year, for the same number of years and with the same interest rate.

You will have saved:

$Future\text{ }value=\$ 33,300* \bigg[((1+0.07)^(11)-1)/(0.07)\bigg]$

$Future\text{ }value=\$ 33,300* 15.7835993=\$525,593.86$

3. For a deposit of $30,800 each year, but with 11 percent interest, for 11 years.

$Future\text{ }value=\$ 30,800* \bigg[((1+0.11)^(11)-1)/(0.11)\bigg]$

$Future\text{ }value=\$ 30,800* 19.56143=\$602,492.04$

The efficient markets hypothesis holds only if all investors are rational. True or false?

Answers

Answer:

This is true, the efficient market hypothesis only holds if all the investors are rational, for example if an investor is not rational and wants to make a loss instead of profit, then the efficient market hypothesis wont hold as the investor will be acting in a way that wont benefit him. When the investor acts irrationally, then he wont react correctly to the information he has and buy or sell stocks which he isn't supposed to buy or sell and this will change the price of the stock from what the price of the stock should be.

Explanation:

Derek has the opportunity to buy a money machine today. The money machine will pay Derek $43,245.00 exactly 5.00 years from today. Assuming that Derek believes the appropriate discount rate is 13.00%, how much is he willing to pay for this money machine?