Question

The following information applies to the questions displayed below) Tony and Suzie graduate from college in May 2021 and begin developing their new business. They begin by offering clinics for basic outdoor activities such as mountain biking or kayaking, Upon developing a customer base, theyll hold their first adventure races. These races will involve four person teams that race from one checkpoint to the next using a combination of kayaking, mountain biking, orienteering, and trail running. In the long run, they plan to sell outdoor gear and develop a ropes course for outdoor enthusiasts. On July 1, 2021, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 27,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tony and Suzie will act as co-presidents of the company. The following transactions occur from July 1 through December 31 Jul. Jul. 1 Sell $13,500 of common stock to Sutie. Jul. 1 Sell $13.500 of common stock to Tony Jul. 1 Purchase a one-year insurance policy for $5,640 (1470 per month) to cover injuries to participants during outdoor clinics bul. 2 Pay legal fees of $1,200 associated with incorporation. Jul. 4 Purchase office supplies of $1.300 on account. ul! 7 Pay for advertising of $400 to local newspaper for an upcoming mountain biking in to be held on July 15 Attendees will be charged 50 on the day of the clinic 8Purchase Le mountain bikes, paying $16.500 cash Oul. 15 on the day of the clinic, Great Adventures receives cash of $3,000 from 50 bikers. Tony conducts the mountain biking clinic Jul 22 Because of the success of the First mountain biking clinic, Tony holds another mountain biking clinic and the company receives $9,500 Jul. 24 Pay $930 to a local radio station for advertising to appear imediately. A kayaking clinic will be held on August 10, and attendees can pay 5138 in advance of $150 on the day of the clinic Jul. 30 Great Adventures receives cash of $7.800 in advance from Kayakers for the upcoming kayak olinis Aug. Great Adventures obtains a $35,000 low interest Loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three Vears, and 6% annual interest is due each year on July 31. Aug 4 The company purchases 14 kayaks, paying $26,600 cash 10 Twenty additional kayakers pay $3,600 ($150 each), in addition to the $7,800 that was paid in advance only 30, on the day of the clinic. Tony conducts the first kayak clinic Aug. 17 Tory conducts second kayak clinic, and the company receives $11,000 cash. Aug. 24 Office supplies of $1,300 purchased on July 4 are paid in full. Sep To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for

Answer 1

Adjustment Adjusted Trial Balance Credit Debit Credit Debit Credit $ - $ - $ 84,110 $ - $ 920 $ 380 $ - $ 2,530 $ 270 - $ 1,240 $ 2,480 $ - $ 2,820 $ 2,820 $ . $ 16,500 $ . $ 26,600 - $ 8,600 8,600 $ 2,800 $ . 2,800 - $ - $ 13,200 13,200 - $ - $ 950 950 38,000 $ 38,000 $ 27,000 $ . 27,000 $ 4,100 $ Unadjusted Trial Balance Account Title Debit Cash $ 84,110 Supplies $ 1,300 Supplies (Racing) $ 2,800 Prepaid Rent $ 3,720 Prepaid Insurance $ 5,640 Equipment (bikes) $ 16,500 Equipment (kayaks) $ 26,600 Accumulated Depreciation Accounts Payable Income Tax Payable Interest Payable Note Payable Common Stock Dividends $ 4,100 Retained Earning Kayak Clinic Revenue - Mountain Biking Clinic Revenue - Orinteering Clinic - Rock Climbing Revenue - Service Revenue (Racing) Salaries Expense 1,600 Depreciation Expense Insurance Expense Rent Expense Supplies Expense (Racing) Supplies Expense Miscellaneous Expense $ 1,600 Advertising Expense $ 1,330 Income Tax Expense $ Interest Expense Legal Fee Expense $ 1,200 - . $ $ $ $ $ 22,400 6,500 19,100 13,900 20,800 22,400 6,500 19,100 13,900 20,800 $ $ $ $ $ $ $ $ $ $ $ $ $ $ - - 8,600 2,820 1,240 2,530 920 - $ $ 1,600 8,600 $ 2,820 $ 1,240 $ 2,530 920 $ 1,600 $ 1,330 13,200 950 1,200 $ $ $ $ $ 13,200 $ 950 $ - $ $ 150,500 $ 150,500 $ 30,260 $ 30,260 $ 173,250 $ 173,250 Total Net Income Grand Total

Income Statement $ 22,400 6,500 19,100 13,900 20,800 82,700 $ $ Kayak Clinic Revenue Mountain Biking Clinic Revenue Orinteering Clinic Rock Climbing Revenue Service Revenue (Racing) Total Revenue Less: Expense Salaries Expense Depreciation Expense Insurance Expense Rent Expense Supplies Expense (Racing) Supplies Expense Miscellaneous Expense Advertising Expense Legal Fee Expense Operating Income Interest Expense $ $ $ $ $ $ $ $ $ 1,600 8,600 2,820 1,240 2,530 920 1,600 1,330 1,200 $ $ $ $ $ $ (21,840) 60,860 (950) 59,910 (13,200) 46,710 Income Tax Expense Net Income Retained Earning Beginning Balance Add: net income Less: Dividends Ending Balance $ $ $ 46,710 (4,100) 42,610 Balance Sheet $ $ $ $ $ 84,110 380 270 2,480 2,820 $ 16,500 26,600 (8,600) $ $ 90,060 Current Assets: Cash Supplies Supplies (Racing) Prepaid Rent Prepaid Insurance Total Current Assets Equipment (bikes) Equipment (kayaks) Accumulated Depreciation Total Assets Current Liabilities: Accounts Payable Income Tax Payable Interest Payable Note Payable Total Current Liabilities Equity: Common Stock Retained Earning Total Liabilities and equity $ $ $ 34,500 124,560 $ $ 2,800 13,200 950 38,000 54,950 $ $ $ $ 27,000 42,610 $ $ 69,610 124,560