E127 Business entity concept Crazy Mountain Sports sells hun

E1-27 Business entity concept Crazy Mountain Sports sells hunting and fishing equipment and provides guided hunting and fishing trips. Crazy Mountain is owned and operated by Karl Young, a well-known sports en- thusiast and hunter. Karl\'s wife, Mila, owns and operates Mila\'s Boutique, a women\'s clothing store. Karl and Mila have established a trust fund to finance their children\'s college education. The trust fund is maintained by First Bank in the names of their children, Steve and Isabelle. For each of the following transactions, identify which of the entities listed should record the transaction in its records.

Solution

1.Karl paid a local doctor for physics which was required by the workmen\'s compensation insurance policy carried by Crazy mountain Sports= Crazy Mountain Sports

(as the policy required by entity insurance of workmen is company to account for it)

2.Karl received a cash advance from custome for guided hunting trip.=Crazy Mountain Sports

(This is a Prepaid Liability(advaance received) for a service to deliver in future)

3. Mila paid her Dues to YWCA =None of above

(isnt business related transaction but a personal subscription)

4. Karl paid a breeder’s fee for an English springer spaniel to be used as a hunting guide dog. =Crazy Mountain Sports\'

(a brought for Business purpose as an Asset)

5.Mila deposited a $10,000 personal check in the trust fund at First Bank= First bank

(trasation takes place at bank not a business purpose)

6. Karl paid for advertisement in a hunter magazine= Crazy Mountain Sports

(Promotion of business, as an expense)

7. Mila authorized the trust fund to purchase mutual fund shares. =First Bank Trust Fund

(since transaction takes place at bank)

8.Mila Donates several dresses from inventory to a local charity= Mila\'s Botique

(The inventory need to be removed from Mila\'s closing inventory)

9. Karl pais for dinner and movie to celebrate the couple\'s wedding anniversary=None of Above

(Is not a package offered to customer at any entity, but their own personal expense)

10. Mila purchased two dozen spring dresses from a Boise designer for a special spring sale= Mila\'s Botique

(as a cost of sales, item purchased for sale)