The Following Ledger Accounts Are Used by the Runway Race

question 165

Essay

The following ledger accounts are used by the Runway Race Track:
Cash
Accounts Receivable
Prepaid Printing
Prepaid Rent
Unearned Admissions Revenue
Note Payable
Interest payable
Admissions Revenue
Concessions Revenue
Interest Expense
Printing Expense
Rent Expense
Instructions
For each of the 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, $105,000.
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 totalled $900,000.
c. On November 1, borrowed $150,000 from their bank by issuing a 6% note payable due in three months. Interest is payable at maturity.
d. On November 5, schedules 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 Runway and will be remitted by December 10.

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Definitions:

Regressive

A type of tax system in which the tax rate decreases as the taxable amount increases, often placing a higher burden on lower-income earners.

Inelastic Supply

A situation where the supply of a good does not significantly change when its price changes, often due to limitations in production capabilities or time constraints.

Excise Tax

A tax imposed on specific goods or services, such as tobacco and alcohol, often intended to discourage their use or generate revenue.

Proportional

In economics, proportional refers to a relationship or distribution that remains the same in proportion or rate, such as a tax that takes the same percentage from all income earners.