1 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. 11 points 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 Suzle will act as co-presidents of the company. The following transactions occur from July 1 through December 31. eBook References Jul. i Sell $14,890 of common stock to Suzie. Jul. 1 Sell $14, eee 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 $1,600 associated with incorporation. Jul. 4 Purchase office supplies of $1,700 on account. Jul. 7 Pay for advertising of $390 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $30 on the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $18, 100 cash. Jul. 15 On the day of the clinic, Great Adventures receives cash of $1,500 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 $2,100 Jul. 24 Pay $890 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $12e in advance or $170 on the day of the clinic. Jul. 30 Great Adventures receives cash of $9,680 in advance from 80 kayakers for the upcoming kayak clinic. Aug. 1 Great Adventures obtains a $32,000 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 years, and 6% annual interest is due each year on July 31. Aug. 4 The company purchases 14 kayaks, paying $19,580 cash. Aug. 10 Twenty additional kayakers pay $3,480 ($170 each), in addition to the $9,680 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic. Aug. 17 Tony conducts a second kayak clinic, and the company receives $12, 280 cash. Aug. 24 Office supplies of $1,700 purchased on July 4 are paid in full. Sep. i to provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $2,880 ($240 per month) in advance. Sep. 21 Tony conducts a rock-climbing clinic. The company receives $15,100 cash. Oct. 17 Tony conducts an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily wooded areas. The company receives $19,300 cash. Dec. 1 Tony decides to hold the company's first adventure race on December 15. Four-person teams will race from checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-climbing skills. The first team in each category to complete all checkpoints in order wins. The entry fee for each team is $600. Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $70 in salary for each team that competes in the race. His salary will be paid after the race. Dec. 8 The company pays $2,000 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense. Dec. 12 The company purchases racing supplies for $2,900 on account due in 30 days. Supplies include trophies for the top-finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse. Dec. 15 The company receives $24.eee cash from a total of forty teams, and the race is held. Dec. 16 The company pays Victor's salary of $2,8ee. Dec. 31 The company pays a dividend of $4,780 ($2,350 to Tony and $2,350 to Suzie). Dec. 31 Using his personal money, Tony purchases a diamond ring for $5,400. Tony surprises Suzie by proposing that they get married. Suzie accepts and they get married! The following Information relates to year-end adjusting entries as of December 31, 2021. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,520 b. Six months' of the one-year Insurance policy purchased on July 1 has expired. c. Four months of the one-year rental agreement purchased on September 1 has expired. d. Of the $1,700 of office supplies purchased on July 4, $310 remains. e. Interest expense on the $32,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,900 of racing supplies purchased on December 12, $140 remains. g. Suzle calculates that the company owes $14,700 In Income taxes. Requirement General Journal General Ledger Trial Balance Income Statement Statement of SE Balance Sheet The ending balance values from the General Ledger tab flows through to the Trial Balance below. Adjusted GREAT ADVENTURES, Inc. Trial Balance December 31, 2021 Account Title Debit Credit Cash S 87.720 310 140 1.920 2,460 18,100 19.500 7.520 2.900 800 14.700 32.000 28.000 4.700 Supplies (Office) Supplies (Racing) Prepaid Rent Prepaid Insurance Equipment (Bikes) Equipment (Kayaks) Accumulated Depreciation Accounts Payable Interest Payable Income Taxes Payable Notes Payable Common Stock Dividends Service Revenue (Clinic) Service Revenue (Racing) Advertising Expense Depreciation Expense Supplies Expense (Office) Supplies Expense (Racing) Salaries Expense Interest Expense Rent Expense Income Tax Expense Legal Fees Expense nsurance Expense Miscellaneous Expense 63,200 24,000 1,280 7.520 1,390 2.780 2.800 800 960 14,700 1.600 2.460 2,000 Total 173.120 $ 173.120 11 points Requirement General Journal General Ledger Trial Balance Income Statement Statement of SE Balance Sheet eBook Choose the appropriate accounts to be reported on the income statement. Select the 'adjusted' from the dropdown, which will then populate the balances in those accounts from the trial balance. Adjusted References GREAT ADVENTURES, Inc. Income Statement December 31, 2021 Revenues: Total Revenues $ 0 Expenses: Total Expense 0 $ 0 Requirement General Journal General Ledger Trial Balance Income Statement Statement of SE Balance Sheet Using the dropdown buttons, select the item that accurately describes the values that either increase or decrease the balance indicated. Select 'Adjusted' from the dropdown, which will then populate the balances in those accounts from the trial balance. Adjusted GREAT ADVENTURES, Inc. Statement of Stockholders' Equity For the year ended December 31, 2021 Common Stock Retained Earnings Total Stockholders' Equity 28,000 28,000 0 (4,700) -4,700 (4.700) 23,300 S 28,000 S S Requirement General Journal General Ledger Statement of Trial Balance Income Statement Balance Sheet SE The balance sheet is the accounting equation: Assets = Liabilities + Equity. Each asset and liability account is reported separately on the balance sheet. Adjusted GREAT ADVENTURES, Inc. Balance Sheet December 31, 2021 Assets Liabilities Current Assets: Current Liabilities: Total Current Liabilities 0 Total Current Assets 0 0 Total Liabilities Stockholders' Equity Long-term assets: 0 0 0 0 0 Total Stockholders' Equity otal Liabilities and Stockholders' Equity To Assets S 0 $ 0