Question

3

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 28,000 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 $14,000 of common stock to Suzie.
Jul.		1		Sell $14,000 of common stock to Tony.
Jul.		1		Purchase a one-year insurance policy for $5,520 ($460 per month) to cover injuries to participants during outdoor clinics.
Jul.		2		Pay legal fees of $1,100 associated with incorporation.
Jul.		4		Purchase office supplies of $1,300 on account.
Jul.		7		Pay $300 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 $60 the day of the clinic.
Jul.		8		Purchase 10 mountain bikes, paying $11,200 cash.
Jul.		15		On the day of the clinic, Great Adventures receives cash of $3,600 from 60 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 $4,200.
Jul.		24		Pay $800 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $120 in advance or $170 on the day of the clinic.
Jul.		30		Great Adventures receives cash of $8,400 in advance from 70 kayakers for the upcoming kayak clinic.

3. Prepare a trial balance. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Stockholders' Equity, Revenue and Expenses.)

GREAT ADVENTURES, INC. Trial Balance July 31, 2021 Accounts Debit Credit 1. . . 1 . IL . Totals $ 0 $ 0

Answer 1

Answer:

GREAT ADVENTURES, INC.
Trial Balance
July 31,2021
Accounts	Debit	Credit
Cash	$25,280
Prepaid insurance	$5,520
Office supplies	$1,300
Equipment	$11,200
Accounts payable		$1,300
Unearned revenue		$8,400
Common stock		$28,000
Service revenue		$7,800
Legal fee expense	$1,100
Advertising expense	$1,100
Total	$45,500	$45,500

Calculations:

Accounts	Debit	Credit
Cash	14000+14000-5520-1100-300-11200+3600+4200-800+8400
Prepaid insurance	$5,520
Office supplies	$1,300
Equipment	$11,200
Accounts payable		$1,300
Unearned revenue		$8,400
Common stock		14000+14000
Service revenue		3600+4200
Legal fee expense	$1,100
Advertising expense	300+800