Expert: Arthur Naman - 10/22/2008

Question
The Ritz Manor is a popular seaside resort. A
double room costs $220 for one night. In order to reserve a room, guests must pay one
night’s stay in advance. On each floor of the hotel, Vendalite Company operates vending
machines with energy bars, juices, and other snacks for guests. Vendalite stocks the
machines and collects revenue every week. Total average weekly revenue from these
machines is $720. The Ritz Manor is entitled to 30% of the revenue from the machines.
Vendalite sends a check to the Ritz Manor once at the end of each quarter for the resort’s
share of the revenue.

Based on this information, what type of adjusting entries does the Ritz Manor have?
How are the amounts of these adjustments determined? Which accounts are affected?

Answer
This sounds like a homework problem. If so, please do your own homework.

If that is not the case, what exactly are you asking. If the entries are recorded as normal, cash receipts, payables, etc. then no adjusting entries will be needed.

I am not sure how my question sounds, but do you know what an adjusting entry is -- to correct something normally. Or to record a transaction nor normally recorded by cash receipts, sales, disbursements, etc.

So, what exactly are you asking.