80.2K

Verified Solution

Link Copied!

Rocky Guide Service provides guided 1-5 day hiking tours throughout the Rocky Mountains. Wilderness Tours hires Rocky to lead various tours that Wilderness sells Rocky receives S1,100 per tour day, and shortly after the end of each month Rocky learns whether it will receive a $110 bonus per tour day it guided during the previous month if its service during that month received an average evaluation of excellent" by Wilderness customers. The $1,100 per day and any bonus due are paid in one lump payment shortly after the end of each month . On July 1, based on prior experience, Rocky estimated there is a 20% chance it will com the bonus for July tours. It guided a total of 10 days from July 1-July 15, On July 16, based on Rocky's view that it had provided excellent service during the first part of the month, Rocky revised its estimate to an 70% chance it would earn the bonus for July tours, Rocky also guided customers for 15 days from July 16-July 31, On August 5 Rocky learned it did not receive an average evaluation of "excellent" for its July tours, so it would not receive any bonus for July, and received all payment due for the July tours. Rocky bases estimates of variable consideration on the expected value It expects to receive. View transaction list View journal entry worksheet No Dato General Journal Debit Cradle Credit 1 July 15 Accounts receivable 11,000 2 July 31 16,500 Accounts receivable Bonus receivable Service revenue 3 August 05 Cash 27,500 Accounts receivable 27,500 4 August 05 Service revenue Bonus receivable

Answer & Explanation Solved by verified expert

See Answer