Answer:
a. We have:
Lift ticket value is = $80,000
Cash = $97,000
b. We have:
Lift ticket value = $854,000
Cash = $337,000
c. We have:
Lift ticket revenue - Best month = January 31
Lift ticket revenue - Amounts = $480,000
Cash - Best Month = December 31
Cash - Amounts = $55,000
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
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:
November 30 - Lift ticket revenue = $26000, Cash = $8000
December 31 - Lift ticket revenue = $200,000, Cash = $63000
January 31 - Lift ticket revenue = $680,000, Cash = $67,000
February 28 - Lift ticket revenue = $760000, Cash = $97,000
March 31 - Lift ticket revenue = $880,000, Cash = $110,000
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.
Lift ticket value =
2. Indicate what amount will be shown in the statements for cash
Cash =
b. The entire "busy season to date" — that is, December 1 through March 31.
1. Indicate what amount will be shown in the statements for Lift Ticket Revenue.
Lift ticket value =
2. Indicate what amount will be shown in the statements for cash.
Cash =
c. In terms of Lift Ticket Revenue and increases in Cash, which has been the resort's best month? (Indicate the dollar amounts.)
Lift ticket revenue - Best month =
Lift ticket revenue - Amounts =
Cash - Best Month =
Cash - Amounts =
The explanation of the answer is now given as follows:
a. Indicate what amount will be shown in the statements for Lift Ticket Revenue and Cash for the month ended February 28.
1. Lift ticket value = Lift ticket revenue for February 28 - Lift ticket revenue for January 31 = $760,000 - $680,000 = $80,000
2. Cash = Cash for February 28 = $97,000
b. Indicate what amount will be shown in the statements for Lift Ticket Revenue and Cash for the entire "busy season to date" — that is, December 1 through March 31.
<u>1. For Lift ticket value</u><u> </u>
Lift ticket value = Lift ticket value for the month ended December 31 + Lift ticket value for the month ended January 31 + Lift ticket value for the month ended February 28 + Lift ticket value for the month ended March 31 …………………….. (1)
Where;
Lift ticket value for the month ended December 31 = Lift ticket revenue for December 31 - Lift ticket revenue for November 30 = $200,000 - $26000 = $174,00
Lift ticket value for the month ended January 31 = Lift ticket revenue for January 31- Lift ticket revenue for December 31 = $680,000 - $200,000 = $480,000
Lift ticket value for the month ended February 28 = Lift ticket revenue for February 28 - Lift ticket revenue for January 31 = $760,000 - $680,000 = $80,000
Lift ticket value for the month ended March 31 = Lift ticket revenue for March 31 - Lift ticket revenue for February 28 = $880,000 - $760,000 = $120,000
Substituting the values into equation (1), we have:
Lift ticket value = $174,000 + $480,000 + $80,000 + $120,000 = $854,000
<u>2. For Cash </u>
Cash = Cash for the month ended December 31 + Cash for the month ended January 31 + Cash for the month ended February 28 + Cash for the month ended March 31 …………….. (2)
Where;
Cash for the month ended December 31 = $63000
Cash for the month ended January 31 = $67,000
Cash for the month ended February 28 = $97,000
Cash for the month ended March 31 = $110,000
Substituting the values into equation (2), we have:
Cash = $63,000 + $67,000 + $97,000 + $110,000 = $337,000
c. In terms of Lift Ticket Revenue and increases in Cash, which has been the resort's best month? (Indicate the dollar amounts.)
The best month indicates the month with the highest value. Therefore, we have:
<u>1. For Lift ticket revenue</u>
Lift ticket revenue - Best month = January 31
Lift ticket revenue - Amounts = $480,000
<u>2. For cash</u>
Increase in cash for the month ended December 31 = Cash for December 31 - Cash for November 30 = $63,000 - $8000 = 55,000
Increase in cash for the month ended January 31 = Cash for January 31 - Cash for December 31 = $67,000 - $63,000 = $4,000
Increase in cash for the month ended February 28 = Cash for February 28 - Cash for January 31 = $97,000 - $67,000 = $30,000
Increase in cash for the month ended March 31 = Cash for March 31 - Cash for February 28 = $110,000 - $97,000 = $13,000
Therefore, we have:
Cash - Best Month = December 31
Cash - Amounts = $55,000
