Great Adventures (This is a continuation of the Great Adventures problem from earlier chapters.) AP3-1 The transactions for July presented in AP 2-1 (on pages 103-104) Conti repeated are Probl here Sell $10,000 of common stock to Suzie. Sell $10,000 of common stock to Tony. Purchase a one-year insurance policy for $4,800 ($400 per month) to cover injuries to participants during outdoor clinics. Pay legal fees of $1,500 associated with incorporation. Purchase office supplies of $1,800 on account. Pay for advertising of $300 to a local newspaper for an mountain biking clinic to be held on July 15. Attendees will be charged $50 the day of the clinic. Purchase 10 mountain bikes, paying $12,000 cash. On the day of the clinic, Great Adventures receives cash of $2,000 from 40 bikers. Tony conducts the mountain biking clinic. Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $2,300. July QB 2 4 upcoming 7 8 15 22 (continued) 002 290 160 CHAPTER 3 The Accounting Cycle End of the Period Pay for advertising of $700 to a local radio station for a kayaking clinic to be held on August 10. Attendees can pay $100 in advance or $150 on the (concluded) Requireds 1. Record 2. Recoro 3. Post tr on De 24 day of the clinic. Great Adventures receives cash of $4,000 in advance from 40 kayakers for 30 the upcoming kavak clinic The following transactions occur over the remainder of the year Aug. 1 Great Adventures obtains a 530,000 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. The company purchases 14 kavaks, costing $28,000. Aug. 10 Twenty additional kavakers pay $3,000 ($150 each), in addition to the $4,000 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic. Tony conducts a second kayak clinic, and the company receives $10,500 cash 4. Prepa 5. For th and s of De 6. Reco 7. Post 8. Prep Aug. 4 Aug. 17 Aug. 24 Office supplies of $1.800 purchased on July 4 are paid in full. Amer AP3-2 end of Sep. 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed, purchasing a one-year rental policy for $2 a ($200 per month). Requi 1. Fou ass Sep. 21 Tony conducts a rock-climbing clinic. The company receives $13,200 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, Clinic fees total $17,900. 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 $500. To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $50 in salary for each team that competes in the race. His salary will be paid after the race. The company pays $1,200 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense. The company purchases racing supplies for $2,800 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. tot 2. Fo lia Dec. cu 3. Li 4, W 5. F Dec. 5 6. U Dec. 8 Dec. 12 Th AP Dec. 15 Dec. 16 Forty teams pay a total of $20,000 to race. The race is held. The company pays Victor's salary of $2,000. The company pays a dividend of $4,000 ($2,000 to Tony and $2,000 to Suzie) Using his personal money, Tony purchases a diamond ring for $4.500. Tony surprises Suzie by proposing that they get married. Suzie accepts and they Re 1 Dec. 31 Dec. 31 2 get married! The following information relates to year-end adjusting entries as of December 31. 2015 a. Depreciation of the mountain bikes purchased on July 8 and kavaks purchased on August 4 totals $8,000, b. Six months' worth of insurance has expired c. Four months' worth of rent has expired d. Of the $1,800 of office supplies purchased on July 4, $300 remains. e Interest expense on the $30,000 loan obtained from the city council on August 1 should be recorded. f Of the $2,800 of racing supplies purchased on December 12, $200 remains. g. Suzie calculates that the company owes $14,000 in income taxes