Travel Inc. sells tickets for a Caribbean cruise on ShipAway Cruise Lines to Carla Vista Company employees. The total cruise package price to Carla Vista Company employees is $ 79,000. Travel Inc. receives a commission of 6% of the total price. Travel Inc. therefore remits $ 74,260 to ShipAway. Prepare the journal entry to record (1) the receipt of payment of $ 79,000 from employees for the cruise packages and (2) the remittance and revenue recognized by Travel Inc. on this transaction.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 1RE: CustomTee Inc. contracts with various customers to sell T-shirts. In the case of sales, CustomTees...
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Travel Inc. sells tickets for a Caribbean cruise on ShipAway Cruise Lines to Carla Vista Company employees. The total cruise package price to Carla Vista Company employees is $ 79,000. Travel Inc. receives a commission of 6% of the total price. Travel Inc. therefore remits $ 74,260 to ShipAway.

Prepare the journal entry to record (1) the receipt of payment of $ 79,000 from employees for the cruise packages and (2) the remittance and revenue recognized by Travel Inc. on this transaction.

 

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