The Following Ledger Accounts Are Used by the Miami Ereghound

question 177

Essay

The following ledger accounts are used by the Miami Ereghound Track: Accounts Receivable
Prepaid Advertising
Prepaid Rent

Unearned Ticket Revenue

Advertising Expense
Rent Expense

Ticket Revenue
Sales Revenue Instructions
For each of the following transactions below prepare the journal entry (if one is required) to record the initial transaction and then prepare the adjusting entry if any required on September 30 the end of the fiscal year.
(a) On September 1 paid rent on the track facility for three months $213000.
(b) On September 1 sold season tickets for admission to the racetrack. The racing season is year-round with 25 racing days each month. Season ticket sales totaled $840000.
(c) On September 1 borrowed $300000 from First National Bank by issuing a 6% note payable due in three months.
(d) On September 5 programs for 20 racing days in September 25 racing days in October and 25 racing days in November were printed for $3500.
(e) The accountant for the concessions company reported that gross receipts for September were $160000. Eight percent is due to the track and will be remitted by October 10.

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Definitions:

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, converting them into the amount of finished goods units they represent.

Conversion Costs

Costs incurred by a company in the process of converting raw materials into finished goods, typically including labor and overhead.

Transferred Units

Refers to items or inventory that have been moved from one location, department, or stage of processing to another within a company.

Equivalent Units

A concept used in process costing that converts partially completed units into a number of equivalent fully completed units.