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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 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 30.000 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 $15,000 of common stock to Sutie. 1 Sell 515,000 of common stock to Tony. Jul 1 Purchase a one-year insurance policy for $5,75 (5480 per month) to cover injuries to participants during outdoor clinics Jul 2 Pay legal fees of $1,200 associated with incorporation, Jul. 4 Purchase office supplies of $1,400 on account Jul 7 Pay for advertising of $200 to local newspaper for an upcoming mountain biking cline to be held on July 15. Attendees will be charged 550 on the day of the clinic Jul 8 Purchase 10 mountain bikes, paying $11,300 cash. Jul 15 on the day of the clinic, Great Adventures receives cash of 52,500 from se bikers. Tory conducts the mountain biking clinic Jul 22 Because of the success of the first mountain bilding clinic, Tony holds another mountain biking in and the company receives 52,8se. Jul. 24 Paysle to local radio station for advertising to appear imediately. A kayaking clinic will be idon Jul. Great Adventures receives cash of 59,10 in advance from Layakers for the upcoming kayak cinc Aug 1 Great Adventures obtains 542, coe 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, bang. 20 enty saditional coroany purchases 34 kayaks, paying $21, ce cash each), in addition to the 59,100 that was paid in advance on July 16., consects second hand chines, and the company receives sai, see cash. Aug 24 Office Supplies of $1,4 Sep 1 te provide better storage of mountain bikes and bayas when not use, the company rents a storage shed for one year, paying $3.000 (5.00 per month) in Sep 21 Tony company receives 114,700 cash. Oct. 17 Tony conducts or senteering cire. Participants practice hox to understand a topographical redan use compass, and orient through heavily wooded areas. The company receives 51 cash. 1 Tony decides to hold rock-cbg skills. The first team in each category to complete all checkpoints in order wins. The entry fee checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running and each team is STO organize and promote the race, Tony hire his college roomate, Victor Victor l be paid sein salary for each team that competes in the race. His salary will be paid after the race. * The company pays $1.6 to purchase a pereit from a state park where the race will be held. The amount is Dec. 12 The company purchases racing supplies for $2.0 on account due in days. Supplies include trophies for the top-Finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field rars to prepare the racecourse Dec 15 The company receives 22,800 cash from a total of forty teams, and the race is held Dec 16 The company pays Victor's salary of 12.000 Dec. 11 The company pays a dividend of 33,0 (51,00 to Tony and $1,0 to Surte). Dec.31 Using his personal money, Tony purchases a diamond ring for 15, Tony surprises Sutie by proposing that they get married. Surte 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 $7100 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 51,400 of office supplies purchased on July 4, 5260 remains e Interest expense on the $42.000 loan obtained from the city council on August 1 should be recorded of the $2.800 of racing supplies purchased on December 12. $200 remains Suzie calculates that the company owes $14700 in income taxes Aug. The clinic. The Dec. for 5524 Six months of the one-year insurance policy purchased on July 1 has expired. Credit General Journal Dec 31, 2021 insurance Expanse Prepaid Insurance Debit 3.000 Recordatory Cleary
