Great Adventures Problem AP2-1 [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 32,000 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 $16,000 of common stock to Suzie. Jul. 1 Sell $16,000 of common stock to Tony. Jul. 1 Purchase a one-year insurance policy for $4,320 ($360 per month) to cover injuries to participants during outdoor clinics. Jul. 2 Pay legal fees of $1,900 associated with incorporation. Jul. 4 Purchase office supplies of $1,100 on account. Jul. 7 Pay $290 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 $40 the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $11,000 cash. Jul. 15 On the day of the clinic, Great Adventures receives cash of $2,000 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 $2,400. Jul. 24 Pay $ 740 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 $7,200 in advance from 60 kayakers for the upcoming kayak clinic. Cash Prepaid Insurance 4,320 July 1 July 1 July 1 July 1 July 2 July 7 x July 8 July 15 % July 22 July 24 July 30 End. bal. 4,320 x End. bal. Supplies 1,100 Equipment 11,000 July 4 July 8 End. bal. 1,100 End. bal. 11,000 Accounts Payable 1,100 Deferred Revenue 7,200 July 4 July 30 End. bal. 1,100 End. bal. 7,200 July 1 July 1 Common Stock 16,000 16,000 July 15 July 22 Service Revenue 2,000 2,400 X End. bal. 32,000 End. bal. 4,400 Advertising Expense 290 Legal Fees Expense 1,900 July 2 July 7 July 24 740 End. bal. 1,030 End. bal. 1,900