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, they'll 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 20,000 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 business activities occur during July for Great Adventures. Jul. 1 Sell $10,000 of common stock to Suzie. Jul i Sell $10,000 of common stock to Tony. Jul. 1 Purchase a one-year insurance policy for $5,040 ($420 per month) to cover injuries to participants during outdoor clinics. Jul. 2 Pay legal fees of $1,400 associated with incorporation. Jul. 4 Purchase office supplies of $1,900 on account. Jul. 7 Pay $330 to a local newspaper for advertising to appear immediately for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $30 the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $11,600 cash. Jul. 15 On the day of the clinic, Great Adventures receives cash of $1,200 from 40 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 $1,500. Jul. 24 Pay $920 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $150 in advance or $200 on the day of the clinic. Jul. 30 Great Adventures receives cash of $9,000 in advance from 60 kayakers for the upcoming kayak clinic.

Answer 1

Journal is basic entry of transaction, every entry has two effect one is debit and other is credit. The journal then it is posted to ledger account. By closing the ledger or T account we get ending balance of respective accounts. On the basis of these accounts trial balance is prepared. The trial balance is help to prepare final account of the company.

cash $ 1, 200 To common stock 10.000 by prepaid Drsurance 5040 To commn stock 10,000 by legal fees 1,400 To service I expenses Revenue by Advertising expense 330 To service Revenue 1,500 by Equipment 11,600 Tode ferred Revenue 9000 by Advertising expenses 9 20 by balance eld (2,410 31,700 31,700 End.bal (12,410 Prepaid Insurance To cash 5040 by balance old s040 5046 5,040 5,040 End. bal. supplies 1900 TO Account I payable I by balance old 1900 1,900 1,900 1 1900 - End bal Equipment To cash 11,600 by balanceeld | 11,600 11,600 11,600 I u 600 I End. bal. - Account payable to balancld 1,900 J1900 by supplies 1900 1900 1900 I End. balance

common stocks $ 10000 To balanceold by cash 20,000 by cash 20,000 on 10,000 120.000 - End balance. 20,000 I Deferred Revenue a - To balance old gooo by cash 9000 9000 9000 T G000 End balance Service Revenue To balancecld 2,700 by cash by cash 12,700 T he End. bal. 1,200 1. 500 12,700 2,700 - Advertising Expenses 330 To cash To cash 920 by balance cld 1250 1250 1250 11250 End.bal I legal Fees Expenses To cash 1400 by balance cld 1,400 Endbal 1,400 1,400

1900 GREAT ADVENTURES INC Trial Balance July 31 2021 Accounte Debit (8) credit cash 1 12,410 prepaid Insurance 5040 supplies Equipment 11,600 Account payable 1,900 common stock 20 ooo Deferred Revenue 9ooo Service Revenue 12700 Advertising expenses 1250 Legal fees Expenses 1400 133,600 33,600