Ski Powder Resort ends its fiscal year on April 30. The business adjusts its acc

Question

Ski Powder Resort ends its fiscal year on April 30. The business adjusts its accounts monthly, but closes them only at year-end (April 30). The resort's busy season is from December 1 through March 31.

Adrian Pride, the resort's chief financial officer, keeps a close watch on Lift Ticket Revenue and Cash. The balances of these accounts at the end of each of the last five months are as follows:

Lift Ticket Revenue Cash
November 30 $ 30,000 $ 9,000
December 31 200,000 59,000
January 31 640,000 94,000
February 28 850,000 116,000
March 31 990,000 138,000

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Mr. Pride prepares income statements and balance sheets for the resort. Assuming they are prepared for:

a. The month ended February 28.
(1) Indicate what amount will be shown in the statements for Lift Ticket Revenue. (Omit the "$" sign in your response.)

Lift ticket revenue $----?
(2) Indicate what amount will be shown in the statements for Cash. (Omit the "$" sign in your response.)
Cash $ -------?

b. The entire "busy season to date" — that is, December 1 through March 31.

(1) Indicate what amounts will be shown in the statements for Lift Ticket Revenue. (Omit the "$" sign in your response.)

Lift ticket revenue $ -----????
(2) Indicate what amount will be shown in the statement for Cash. (Omit the "$" sign in your response.)
Cash $ ------ ???
c. In terms of Lift Ticket Revenue and increases in Cash, which has been the resort's best month? (Indicate the dollar amounts.) (Omit the "$" sign in your response.)

Best Month Amounts
Lift ticket revenue Month and Amount $ ??
Cash Month and Amount $ ??

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Explanation / Answer

a. The month ended February 28. (1) Indicate what amount will be shown in the statements for Lift Ticket Revenue. As accounts are monthly update, Feb revennue will be Rev Total of Feb - Rev Total of Jan = 850,000-640,000 = 210,000 Lift ticket revenue $210,000 (2) Indicate what amount will be shown in the statements for Cash. (Omit the "$" sign in your response.) Similar to (1) above, Cash for Feb = 116000-94000 = 22,000 Cash $22,000 b. The entire "busy season to date" — that is, December 1 through March 31. (1) Indicate what amounts will be shown in the statements for Lift Ticket Revenue. (Omit the "$" sign in your response.) Total Rev for period Dec-Mar will be Mar rev - Nov Rev = 990000-30,000 = 960,000 Lift ticket revenue $960,000 (2) Indicate what amount will be shown in the statement for Cash. (Omit the "$" sign in your response.) Total Cash for period Dec-Mar will be Mar Cash - Nov Cash = = 138000-9000 = 129000 Cash $129000 c. In terms of Lift Ticket Revenue and increases in Cash, which has been the resort's best month? (Indicate the dollar amounts.) (Omit the "$" sign in your response.) If we see the growth in Revenue month on month, we see that a huge increase is there from Dec to Jan ie from 200,000 to 640,000. SO best month for Lift Ticket Revenue is Jan & amount of Rev is 640000-200000 = 440,000 Best Month : January, Amounts = 440,000 Cash has increased sharply from 9000 to 59000 from Nov to Dec. So Best month for Cash is Dec. Amount of cash is 59000-9000 = 50000

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