1 / 14

Question P3-7

Question P3-7. By: Arash Foroudi Becky Truax Julio Perez Ken Chen. Question.

eleanorturner
Download Presentation

Question P3-7

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Question P3-7 By: Arash Foroudi Becky Truax Julio Perez Ken Chen

  2. Question Cedar Fair, L. P. (Limited Partnership) owns and operates four seasonal amusement parks: Cedar Point in Ohio, Valleyfair near Minneapolis/St. Paul, Dorney Park and Wildwater Kingdom near Allentown, Pennsylvania, and Worlds of Fun/Oceans of Fun in Kansas City. The following are summarized transactions similar to those that occurred in a recent year (assume 2008):

  3. Requirements 1.) For each of these transactions, record journal entries. Use the letter of each transaction as its reference. Note that transaction (d) will require 2 entries, one for revenue recognition and one for the related expense. 2.) Use the following chart to identify whether each transaction results in a cash flow effect from operating (O), investing (I), or financing (F) activities, and indicate the direction and amount of the effect on cash (+ for increase and - for decrease). If there is no cash flow effect, write none. The first transaction is provided as an example.

  4. (a) Guests at the parks paid $89,664,000 cash in admissions. (R2) Operating +89,664,000

  5. (b) The primary operating expenses (such as employee wages, utilities, and repairs and maintenance) for the year were $66,347,000 with $60,200,000 paid in cash and the rest on account. (R2) Operating -60,200,000

  6. (c) Interest paid on long term debt was $6,601,000 (R2) Operating -6,601,000

  7. (d) The parks sell food and merchandise and operate games. The cash received during the year for these combined activities was $77,934,000. The cost of the merchandise sold during the year was $19,525,000. (R2) Operating +77,934,000

  8. (e) Cedar Fair purchased and built additional buildings, rides, and equipment during the year, paying $23,813,000 in cash. (R2) Investing -23,813,000

  9. (f) The most significant assets for the company are land, buildings, rides, and equipment. Therefore, a large expense for Cedar Fair is depreciation expense (related to using these assets to generate revenues during the year). For the year, the amount was $14,473,000 (credit Accumulated Depreciation) (R2) None

  10. (g) Guests may stay in the parks at accommodations owned by the company. During the year, Accommodations Revenue was $11,345,000; $11,010,000 was paid by the guests in cash and the rest was owed on account. (R2) Operating +11,010,000

  11. (h) Cedar Fair paid $2,900,000 principal on notes payable. (R2) Financing -2,900,000

  12. (i) The company purchased $19,100,000 in food and merchandise inventory for the year, paying $18,000,000 in cash and owing the rest on account. (R2) Operating -18,000,000

  13. (j) The selling, general, and administrative expenses such as the president’s salary and advertising for the parks, classified as operating expenses, for the year were $21,118,000; $19,500,000 was paid in cash, and the rest was owed on account. (R2) Operating -19,500,000

  14. (k) Cedar Fair paid $8,600,000 on accounts payable during the year. (R2) Operating -8,600,000

More Related