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 36,000 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 $18,000 of common stock to Suzie. Jul. 1 Sell $18,000 of common stock to Tony. Jul. 1 Purchase a one-year insurance policy for $4,920 ($410 per month) to cover injuries to participants during outdoor clinics. Jul. 2 Pay legal fees of $1,700 associated with incorporation. Jul. 4 Purchase office supplies of $1,500 on account. Jul. 7 Pay $360 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 $50 the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $10,100 cash. Jul. 15 On the day of the clinic, Great Adventures receives cash of $2,000 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 $2,500. Jul. 24 Pay $810 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $110 in advance or $160 on the day of the clinic. Jul. 30 Great Adventures receives cash of $5,500 in advance from 50 kayakers for the upcoming kayak clinic. Great Adventures Problem AP2-1 Part 3 3. Prepare a trial balance. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Stockholders' Equity,

Answer 1

GREAT ADVENTURES INC.

Trial Balance

July 31 2021  

Accounts	Debit ($)	Credit ($)
Assets
Cash	26,610	-
Bikes	10,100	-
Office Equipment	1,500	-
Expenses
Newspaper and Radio Advertisement	1,170	-
Insurance	4,920	-
Legal Expenses	1,700	-
Revenue
Sales	-	4,500
Sales in Advance	-	5,500
Shareholder's Equity
Common Stock	-	36,000
Total	46,000	46,000