Question

Questions below

1. Aug 1 - Great Adventures obtains $30000, low interest loan for the company. Loan is Due in 3 Years and 6% annual interest is due each year on July 31

2. Aug 4 - The Company purchases 14 kayaks, paying 40,320 cash in total

3. Aug 10 - 20 Kayakers pay $3,800 for clinic.

4. Aug 12 - Collected 2000 from July clinic

5 Aug 17- Tony Conducts second Kayak clinic and the company receives 10500 cash

6. Aug 24 Paid for supplies purchased on account on July 4 in full, $1,900

7. Sep 1 Company Rents storage for mountain bikes on kayaks when not in use for one year paying $2,400 ($200 Per month)

8. Sep 21 Tony conducts a rock climber clinic. The company bills clients $13,200 that is due in 30 Days

9. Oct 17 Paid the Local Radio Station $1,200 for advertising Great Adventures for the remainder of October

10. Oct 20. Collected 80% of amount due from the Sep 21 Rock Climbing Clinic

11. Dec 1 Tony decides to hold company first adventure race on Dec 14. The entry fee will be $500 for each team

12. Dec 5 to help with the race, Tony hires Victor will be paid $50 salary for each team that competes in race. Hos salary will be paid after the race

13. Dec 8 Company pays $1,200 for permit in state park where the race will be. Amount will be recorded as a MISC expense

14. Dec 12 - The company purchases racing supplies $2,800 on account due in 30 Days.

15 Dec 15 The company receives $20,000 Cash from a total of 40 teams that are in the race.

16 Dec 16 Company pays Victors Salary (ignore Taxes)

17 Dec 31 The Company pays divided of $4000 ($2000 to Tony and $2000 to Suzie)

18 Dec 31 Using personal money Tony purchases a diamond ring for $4,500. Tony surprises Suzie by proposing, she accepts, and they get married.  

1. Create Adjusting Journal using info below

1. Depreciations of mountain bikes purchase July 8 was $1090 and kayaks purchased on August 4 was $5600
2. Record adjustments for one year insources policy purchased on July 1 (One Year policy - $4,920- $410 Per Month)
3. Record adjustment for one-year rental agreement purchased on September 1
4. Record adjustments for deferred revenue from July, all revenue was earned at the August 10 clinic
5. Of the $1900 of office supplies purchased in July, $300 remains
6. Interest expense on the $30000 loan obtained, on August 1^st should be recorded
7. Of the $2800 of racing supplies purchased on Dec 12, $200 remains
8. Suzie calculates that the company owes $14000 in income taxes

2. After Journal Create a Closing Journal

-Dec 31 Close the revenue Accounts

-Dec 31 Close the Expense Accounts

-Dec 31 Close the Dividend Accounts

3. Create General Ledger (Aug 1 Balance already included)

		Cash
No.	Date	Debt	Credit	Balance
BB	Aug 1			30,590

	Accounts Receivable
No.	Date	Debt	Credit	Balance
BB	Aug 1			2000

Create the rest in the same format as above

Supplies Office - Aug 1 Balance 1,900

Supplies Racing -

Prepaid Insurance - Aug 1 - Balance 4,920

Prepaid Rent -

Equipment - Kayaks

Equipment - Bikes - Aug 1 - Balance 11,900

Accumulate Depreciation - Bikes

Accumulate Depreciation - Kayaks

Accounts Payable - Aug 1 - Balance 1,900

Interest Payable

Income Tax Payable

Deferred Revenue Aug 1 - Balance 11,200

Notes Payable

Common Stock Aug 1 - Balance 37,000

Retained Earnings

Dividends

Service Revenue - Aug 1 - Balance 3,600

Advertising Expense Aug 1 - Balance 1,090

Depreciation Expense

Supplies Expense - Office

Supplies Expense - Racing

Salaries Expense

Interest Expense

Rent Expense

Income Tax Expense

Legal Fees Expense Aug 1 - Balance 1,300

Insurance Expense

Miscellaneous Expense

4. Create Trail Balance

5. Create Income Statement, Statement of Stockholders Equity, and Classified Balance Sheet

Answer 1

1)
Aug.1	Cash	30000
	6% Loan - City Council		30000
	(Receipt of loan from City Council)
Aug.4	Equipment	40320
	Cash		40320
	(Purchase of 14 kayaks)
Aug.10	Cash	3800
	Service revenue		3400
	(Service revenue from 20 kayakers)
Aug. 12	Cash	2000
	Service revenue		2000
	(Cash received for July clinic)
Aug.17	Cash	10500
	Service revenue		10500
	(Cash received for 2nd kayaking clinic)
Aug.24	Accounts Payable	1900
	Cash		1900
	(Payment made for office supplies purchased on July4)
Sept.1	Prepaid Rent	2400
	Cash		2400
	(Payment for 1-year rental policy for storage shed)
Sept.21	Cash	13200
	Service revenue		13200
	(Cash received for rock climbing clinic)
Oct.17	Advertising Expenses	1200
	Cash		1200
Oct.20	Cash	10560
	Service revenue		10560
	(Cash received for Rock climbing clinic)
Dec.1	No entry required
Dec.5	No entry required
Dec.8	Miscellaneous expenses	1200
	Cash		1200
	(Payment made for permit for conducting race)
Dec.12	Racing supplies	2800
	Accounts Payable		2800
	(Purchasing racing supplies)
Dec.15	Cash	20000
	Revenue - Racing		20000
	(Cash received for the racing event held)
Dec.16	Salary expenses
	Cash
	(Salary of Victor paid)
Dec.31	Dividend	4000
	Cash		4000
	(Dividend paid)
Dec.31	No entry required
2. Adjustment entries as at December 31, 2021 are shown below
GREAT ADVENTURE INC
Adjustment entries as at December31 , 2018
Dec.31	Depreciation expense	6690
	Accumulated Depreciation		6690
	(Depreciation expense on mountain bikes and kayaks provided)
Dec.31	Insurance expense (4920/2)	2460
	Prepaid insurance		2460
	(Insurance expense for six months acounted)
Dec.31	Rent Expense (2400/12 x 4)	800
	Prepaid Rent		800
	(Rent expense for four months accounted)
Dec.31	Office supplies expense	1600
	Office supplies		1600
	(Office supplies expense accounted)
Dec.31	Interest expense (30000 x 6% x 5/12)	750
	Interest payable		750
	(Interest expense for five months provided)
Dec.31	Racing supplies expense (2800 - 200)	2600
	Racing supplies		2600
	(Racing supplies expense accounted)
Dec.31	Income tax expense	14000
	Income tax payable		14000
	(Income tax expense for the year provided)