Part 3 of 6 Required information Great Adventures Problem AP3-1 The following information applies to the questions displayed below) 22 points 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 24,000 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 $12, eee of common stock to Suzie. Jul. 1 Sell $12,eee of common stock to Tony. Jul. 1 Purchase a one-year insurance policy for $4,920 ($410 per month) to cover injuries to participants during outdoor clinics. Jul. 2 Pay legal fees of $1,400 associated with incorporation Jul. 4 Purchase office supplies of $1,300 on account. Jul. 7 Pay for advertising of $21e to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $40 on the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $16,800 cash. Jul 15 on the day of the clinic, Great Adventures receives cash of $1,600 from 40 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 $1,950. Jul. 24 Pay 5610 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $110 in advance or $160 on the day of the clinic. Jul 30 Great Adventures receives cash of $4,400 in advance from 4e kayakers for the upcoming kayak clinic. Aug. 1 Great Adventures obtains a $36, eee 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 $17,600 cash Aug. 10 Twenty additional kayakers pay $3,200 ($160 each), in addition to the $4,400 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 $11,500 cash. Aug. 24 Office supplies of $1,300 purchased on July 4 are paid in full. Prey 4 5 6 7 of 10 Next > You received partial credit in the previous attempt Sep. Check my work View previous attempt paid in full. 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $3,720 ($310 per month) in advance Sep. 21 Tony conducts a rock-climbing clinic. The company receives $14,400 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. The company receives $18, see 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. The first team in each category to complete all checkpoints in order wins. The entry fee for each tea is $590. Dec. 5 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. Dec. The company pays $1,800 to purchase a permit 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,Jee 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 Dec. 15 The company receives $23,600 cash from a total of forty teams, and the race is held. Dec. 16 The company pays Victor's salary of $2,000. Dec. 31 The company pays a dividend of $4,100 ($2,ese to Tony and $2,ose to Suzie). Dec.31 Using his personal money, Tony purchases a diamond ring for $3,700. Tony surprises Suzie by proposing that they get married. Suzie 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 thas expired. Four months of the one year rental agreement purchased on September has expired d. Of the $1.00 of office supplies purchased on July 4, 5280 remains e. Interest expense on the $36.000 loan obtained from the city council on August 1 should be recorded 1. Of the $2,300 of racing supplies purchased on December 12. $200 Suze calculates that the company owes $3,400 in income taxes Great Adventures Problem AP3-1 Part 4 4. Prepare an adjusted trial balance as of December 3 2021 56 of 108 Next > 4. Prepare an adjusted trial balance as of December 31, 2021. Credit 8,700 2,300 13,400 GREAT ADVENTURES, Inc. Adjusted Trial Balance December 31, 2021 Accounts Debit Cash Prepaid Insurance Prepaid Rent Supplies (Office) 2807 Supplies (Racing) 2101 Equipment (Bikes) 16,800 Equipment (Kayaks) 17,600 Accumulated Depreciation Accounts Payable Income Tax Payable Interest Payable Notes Payable Common Stock Dividends 4,100 Service Revenue (Clinic) Service Revenue (Racing) Advertising Expense 820 Depreciation Expense 8,7007 Income Tax Expense Insurance Expense Interest Expense Legal Fees Expense 1.4001 Miscellaneous Expense 1,800 Rent Expense 2.000 Sales Expense Supplies Expense (Office) Supplies Expense (Racing) $ 53,710 $ Totals 36,000 24,000 84.400