Recording Journal Entries vail Resorts Inc. owns and operates five premier year-

Question

Recording Journal Entries vail Resorts Inc. owns and operates five premier year-round properties (vail Mountain, Beaver Creek Resort, Breckenridge Mountain and keystone Resort, all located in the Colorado Rocky Mountain Resort located in the Lake Tahoe area of California The company also owns a collection of luxury hotels resorts and lodging properties The company sells lift tickets ski lessons, and ski equipment. The following hypothetical December transaction are typical of those that occur at the resorts.

Explanation / Answer

1- a. dr. cash $2.5M cr. note payable $2.5M ** cash is increased by debits payables are increased with credit b. dr. equipment- snowplow $95,000 cr. cash $95,000 ** to increase asset account you debit it, cash is reduced with credit entry. c. dr. equipment - ski equipment $40,000 cr. accounts payable $40,000 ** again you increase the asset account and loans are payables which are increased with credit entry d. dr. expenses -maintenance $62,000 cr. Cash $62,000 ** expense account increased with debits , reduce cash paid with credit e. dr. Cash $372,000 cr. unearned revenue - Season passes Jan - March $372,000 **Increase cash received with debit, revenue is not earned yet so you put it in an account called unearned revenue. f. dr. accounts receivable $750 cr. inventory - skis $450 cr. unearned revenue - sales $300 **(would double check the credit side of F) Equipment sold on credit so its a receivable. g. dr. Cash $270,000 cr. revenue -lift passes $270,000 ** increased cash with debit, revenue is earned since it was received in december h. dr. Cash $3200 cr. unearned revenue - townhouse rental $3200 ** increased cash received, cr to unearned revenue since the service was paid ahead of time. i. dr. accounts payable $20,000 cr. cash $20,000 ** dr. to reduce payables account , cr to reduce cash account j. dr. cash $400 cr. accounts receivable $400 **dr. to record cash received, cr. to reduce account receivable account k. dr. Salary expense $ 258,000 cr. cash $258,000 ** dr. expense to record salary expense, cr. to reduce cash paid out. 2. DR CR 1200 750 400 1550 ** 1200 initial balance, plus 750 of skis sold on account less 400 paid of previous sale. Ending in receivables account $1550

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