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Posted on Jul 09, 2024

Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few

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Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from Kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2022. All watches are sold for $720 each. Jul. 17 Purchased 83 watches for $12, 450 ($150 per watch) on account. Jul. 31 Sold 82 watches for $59, 040 cash. Aug. 12 Purchased 62 watches for $9,920 ($160 per watch) cash. Aug. 22 Sold 52 watches for $37, 440 on account. Sep. 19 Paid for watches purchased on July 17. Sep. 27 Receive cash of $22, 464 for watches sold on account on August 22. Oct. 27 Purchased 135 watches for $22,950 ($170 per watch) cash. Nov. 20 Sold 112 watches for $80, 640 cash. Dec. 4 Purchased 122 watches for $21, 960 ($180 per watch) on account. Dec. 8 Sold 62 watches for $44, 640 on account. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $100 per watch. Adjusted GREAT ADVENTURES, INC. Trial Balance December 31, 2022 Account Title Credit Debit 37,100 35,000 3,500 56,000 Cash Accounts Receivable Allowance for Uncollectible Accounts Equipment Accumulated Depreciation Accounts Payable Interest Payable Income Tax Payable Notes Payable Common Stock Retained Earnings Service Revenue Sales Discounts Interest Revenue Depreciation Expense Supplies Expense Salaries Expense Bad Debt Expense Interest Expense Rent Expense Income Tax Expense Insurance Expense Total 29,500 5,000 1,300 15,600 52,000 24,785 36,200 50,000 460 175 21,500 1,600 35,000 3,500 2,900 3,500 15,600 5,900 218,060 $ 218,060 Adjusted GREAT ADVENTURES, INC. Income Statement For the Period Ended December 31, 2022 Revenues Net Sales Gross Profit Operating Expense: Total Operating Expenses Operating Income (Loss) Income Before Income Taxes Adjusted GREAT ADVENTURES, INC. Balance Sheet December 31, 2022 Assets Liabilities Current Assets: Current Liabilities: Total Current Liabilities Total Current Assets Long-term Assets: Total Liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' Equity Total Assets Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from Kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2022. All watches are sold for $720 each. Jul. 17 Purchased 83 watches for $12, 450 ($150 per watch) on account. Jul. 31 Sold 82 watches for $59, 040 cash. Aug. 12 Purchased 62 watches for $9,920 ($160 per watch) cash. Aug. 22 Sold 52 watches for $37, 440 on account. Sep. 19 Paid for watches purchased on July 17. Sep. 27 Receive cash of $22, 464 for watches sold on account on August 22. Oct. 27 Purchased 135 watches for $22,950 ($170 per watch) cash. Nov. 20 Sold 112 watches for $80, 640 cash. Dec. 4 Purchased 122 watches for $21, 960 ($180 per watch) on account. Dec. 8 Sold 62 watches for $44, 640 on account. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $100 per watch. Adjusted GREAT ADVENTURES, INC. Trial Balance December 31, 2022 Account Title Credit Debit 37,100 35,000 3,500 56,000 Cash Accounts Receivable Allowance for Uncollectible Accounts Equipment Accumulated Depreciation Accounts Payable Interest Payable Income Tax Payable Notes Payable Common Stock Retained Earnings Service Revenue Sales Discounts Interest Revenue Depreciation Expense Supplies Expense Salaries Expense Bad Debt Expense Interest Expense Rent Expense Income Tax Expense Insurance Expense Total 29,500 5,000 1,300 15,600 52,000 24,785 36,200 50,000 460 175 21,500 1,600 35,000 3,500 2,900 3,500 15,600 5,900 218,060 $ 218,060 Adjusted GREAT ADVENTURES, INC. Income Statement For the Period Ended December 31, 2022 Revenues Net Sales Gross Profit Operating Expense: Total Operating Expenses Operating Income (Loss) Income Before Income Taxes Adjusted GREAT ADVENTURES, INC. Balance Sheet December 31, 2022 Assets Liabilities Current Assets: Current Liabilities: Total Current Liabilities Total Current Assets Long-term Assets: Total Liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' Equity Total Assets