GAMA 1 w !!!!!!!???? 222 WEHR HR w . 20 he Se 40 41 000 OG to $2.000 10 MO Great Adventures Problem AP31 pm www. 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 23,000 shares of common stock for Sleach. Each share of stock represents a unit of ownership. Tony and Suzie will act as co presidents of the company. The following transactions occur from July 1 through December 31. Jol. 1 Sell $11,500 of common stock to susie. Jul. 1 Sell $11,500 ot common stock to Tony. Jul. 1 Purchase one-year insurance policy for 1.080 (8340 per months to cover injuries to pardipants during outdoor clinics Jul. 2Pay legal fees of $1,300 associated with incorporation Jul. Parehase office supplies of $1,400 on account Jul. 7 Day for advertising of 1910 to local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged 560 on the day of the elite. Jul. Purchase 10 mountain bikes, paying $19.800 cash. Jul 15 on the day of the elinie, Great Adventures receives cash of $2,400 from 60 bitare. Tony conduct 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 52,900. Jul. 24 ray $830 to a local radio station for advertising to appear inmediately. A kayaking cline will be held on August 10, and attendees can pay $130 in advance or $180 on the day of the clinic. Jul. 30 Great Adventures receives cash of $9.100 in advance from 76 Rayakere for the upcoming kayak elinie. Aug. 1 Great Adventures obtains $49,000 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 annual interest is due each year on July 3. Aug. The company purchase 14 kayaks, paying $10,000 cash Aug. 10 Twenty additional kayakere pay $3,600 (180 each), in addition to the $100 that was paid is advance on July 30, on the day of the clinic. Tony conducte the first kayak clinic. Aug. 17 Tony conducte second kayak elince, and the company receive $12,100 cach Ref. 24 office supplies of $1,400 purchased on July are paid in full. Sep. 1 to provide better storage of mountain bikes and kayaks when in the company renta storage shed for one year, paying $3.000 (5250 per month) in advance. Sep. 21 Tony conducte roekelimbing cline. The company receives $10,00 cash Oct. 17 Tony conducte an orienteering clinic. Participants practice how to understand topographical map. read an altimeter, una compass, and orient through heavily wooded areas. The company receives $18.000 cash. Dee 1 Tony decides to hold the company that adventure race on December 15. Tout-pet team will rare from checkpoint to checkpoint using a combination of mountats bing kayak entering, trail running, and rock-elimbing skills. The first team in each catry to complete a checkpoint in order wine. The entry fee for each te 500. Dec. To help organize and promote the race, Tony hires i college tomta. Vietor. Vietor will be paid 540 in salary for each team that competes in the race. i salary will be paid at the race. Dec. The company paye $1,400 to purchase it from state park where the race will be hela. The amount is recorded as a miscellaneous expense. Dec. 12 The company purchase racing supplies for $2,000 on account de 30 days. Supplies in trophies for the top-finishing teams in each category. promotional shirts, nack food and drinks fot participants and field markere to prepare the racer Dec. 15 The company receives 420,000 cash from a total of forty team, and there halda Dec. 16 The company pays Victor salary of 51.600. Dec. 31 The company pays e dividend of 54,600 ($2,300 to Tony and $2.100 to uti). Dec. 31 Veing hi. penal money, Tony purchases dimmend ring for 14,000. Tony surprise by proposing that they wet married. fusie secept and they get married! The following information relates to year-end adjusting entries as of December 31, 2021 Depreciation of the mountain bikes purchased on July B and kayaks purchased on August 4 totals $8,900 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 $1,400 of office supplies purchased on July 4, $280 remains e. Interest expense on the $49,000 loan obtained from the city council on August I should be recorded of the $2,000 of racing supplies purchased on December 12. $130 remains Suzie calculates that the company owes $14.500 in income taxes GREAT ADVENTURES, Inc. Adjusted Trial Balance December 31, 2021 Accounts Debit Credit Cash Prepaid Insurance Prepaid Rent Supplies (Office) Supplies (Racing) Equipment (Bikes) Equipment (Kayaks) Accumulated Depreciation Accounts Payable Income Tax Payable Interest Payable Notes Payable Common Stock Dividends Service Revenue (Clinic) Service Revenue (Racing) Advertising Expense Depreciation Expense Income Tax Expense Insurance Expense Interest Expense Legal Fees Expense Miscellaneous Expense Rent Expense Salries Expense Supplies Expense (Office) Supplies Expense (Racing) Totals $ 0 $ 0