Great Adventures Problem AP3-1 [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 fpur-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 21,000 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 transactions occur from July 1 through December 31. Jul. 1 Sell $10.500 of common stock to Suzie. Jul. 1 Sell $10,500 of common stock to Tony. Jul. 1 Purchase a one-year Insurance policy for $4,440 ($370 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 Day for advertising of $370 to a local newspaper for an upcoming mountain biking cline to be held on July 15. Attendees will be charged $50 on the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $19,400 cash. Jul 15 on the day of the clinic, Great Adventures receives canh of $4,000 from 80 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 $4,300. Jul. 24 Pay $900 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $150 in advance or $200 on the day of the clinic. Jul. 30 Great Adventures receives cash of $12,000 in advance from 80 kayakers for the upcoming kayak clinic. Aug. 1 Great Adventures obtains a $36,000 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 $19,500 cash. Aug. 10 Twenty additional kayakers pay $4,000 ($200 each), in addition to the $12,000 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 $11,400 cash. Aug. 24 Office supplies of $1,500 purchased on July 4 are paid in full. uy. Luv yucu ve ulu. Sep. 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $3,600 ($300 per month) in advance. Sep. 21 Tony conduets a rock-climbing clinic. The company receives $14,100 cash. oct. 17 Tony conducto 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 $18,300 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. They first team in each category to complete all checkpoints in order wins. The entry fee for each teah is $550. 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 $1,000 to purchase a pornit 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 $2,700 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. Doc. 15 The company receives $22,000 cash from a total of forty teams, and the race is held. Dec. 16 The company pays Victor's salary of $2,800. Dec. 31 The company pays a dividend of $3,200 ($1,600 to Tony and $1,600 to Suzie). Dec. 31 Using his personal money, Tony purchases a diamond ring for $4,100. Tony wurprises Suzie by proposing that they get married. Suaie 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 $8,700. 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 $1,500 of office supplies purchased on July 4, $360 remains. e. Interest expense on the $36,000 loan obtained from the city council on August 1 should be recorded 1. Of the $2,700 of racing supplies purchased on December 12, $220 remains g. Suzie calculates that the company owes $13,200 in income taxes. Great Adventures Problem AP3-1 Part 5 5. For the period July 1 to December 31, 2021, prepare an income statement, statement of stockholders' equity and classified balance Sheet Answer is not complete. Complete this question by entering your answers in the tabs below. Income Stmt of Statement Stockholders Balance Sheet Equity For the period July 1 to December 31, 2021, prepare an income statement. GREAT ADVENTURES, Inc. Income Statement December 31, 2025 Revenues Service Revenue (Cinio) $ 68.100 Service Revenue (Racing) 22.000 00 $ 90,100 Total Revenues Expenses Advertising Expense Depreciation Expense income Tax Expense OOO 1.270 8.700 13.200 Revenues: Service Revenue (Clinic) Service Revenue (Racing) 68,100 22,000 $ 90,100 Total Revenues Expenses Advertising Expense Depreciation Expense Income Tax Expense Insurance Expense Interest Expense Legal Fees Expense Miscellaneous Expense Rent Expense Salaries Expense Supplies Expense (Office) Supplies Expense (Racing) 1.270 8,700 13,200 2,220 900 1,700 1,000 1,200 2,800 1.140 2,480 Total Expense 36,610 53,490 $ Required information Answer is not complete. Complete this question by entering your answers in the tabs below. Income Stmt of Statement Stockholders Balance Sheet Equity For the period July 1 to December 31, 2021, prepare a statement of stockholders' equity. All account balances on July 1 were zero. GREAT ADVENTURES, Inc. Statement of Stockholders' Equity For the Period Ended December 31, 2021 Total Retained Common Stock Stockholders' Earnings Equity Balance at July 1 OS 0 Issuance of Common Stock 21,000 0 21,000 Dividends 3,200 3,200 Net Income for 2021 Balance at December 31 0 0 0 0 Income Stmt of Statement Stockholders Balance Sheet Equity Prepare a classified balance sheet as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.) GREAT ADVENTURES, Inc. Balance Sheet December 31, 2021 Assets Liabilities Current Assets: Current Liabilities: Cash S 88,690 Accounts Payable $ 2.700 Prepaid Insurance 2.220 Income Tax Payable 13.200 Prepaid Rent 2.400 Interest Payable 900 Supplies (Office) 360 Supplies (Racing) 220 Total Current Liabilities 16,800 Notes Payable 36.000 Total Current Assets 93,890 Total Liabilities 52,800 Long-term assets Stockholders' Equity Equipment (Bikes) 19,400 Common Stock 21,000 Equipment (Kayaks) 19,500 Retained Earnings Accumulated Depreciation Total Stockholders' Equity 21,000 Total Assets $ 132,790 Total Liabilities and Stockholders' Equity $ 73.800