The Following Ledger Accounts Are Used by the Heartland Race

question 235

Essay

The following ledger accounts are used by the Heartland Race Track:
Accounts Receivable
Prepaid Advertising
Prepaid Rent
Unearned Sales Revenue
Sales Revenue
Advertising Expense
Rent Expense
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 November 30, the end of the fiscal year.
(a) On November 1, paid rent on the track facility for three months, $150,000.
(b) On November 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 $960,000.
(c) On November 1, borrowed $250,000 from First National Bank by issuing a 6% note payable due in three months.
(d) On November 5, programs for 20 racing days in November, 25 racing days in December and 15 racing days in January were printed for $3,000.
(e) The accountant for the concessions company reported that gross receipts for November were $140,000. Ten percent is due to Heartland and will be remitted by December 10.

Identify psychological theories related to human behavior and motivation, specifically reactions to threats to personal freedom.

Understand the concept of demand characteristics and their impact on research validity.

Understand the concept and impact of eliminating unprofitable segments on net income and fixed expenses.

Comprehend the definitions and applications of cost of capital, hurdle rate, and minimum rate of return.

---

Definitions:

Cheaper Market

A market characterized by lower prices, often due to lower cost of living, production, or services compared to other markets.

Countertrade

A method of international trade where goods and services are exchanged directly for other goods and services, without using hard currency.

Skimming Pricing Strategy

A pricing strategy involving setting high initial prices for products or services, targeting segments willing to pay more before lowering prices over time.

High-end Cars

Vehicles that are considered to be of the highest quality, often characterized by luxury, superior performance, and high price points.