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please post answers clearly. Tony and Suzie graduate from college in May 2021 and begin developing their new business. They begin by offering clinics for

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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 31,000 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 $15,500 of common stock to Suzie. Jul. 1 Sell $15,500 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 $1,500 associated with incorporation. Jul. 4 Purchase office supplies of $1,700 on account. Jul. 7 Pay for advertising of $350 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $50 on the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $12,500 cash. Jul. 15 On the day of the clinic, Great Adventures receives cash of $2,500 from 50 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 $3,100. Jul. 24 Pay $830 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $120 in advance or $170 on the day of the clinic. Jul. 30 Great Adventures receives cash of $7,200 in advance from 60 kayakers for the upcoming kayak clinic. Aug. 1 Great Adventures obtains a $44,000 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 $16,800 cash. Aug. 10 Twenty additional kayakers pay $3,400 ($170 each), in addition to the $7,200 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 $12,200 cash. Aug. 24 office supplies of $1,700 purchased on July 4 are paid in full. 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 $4,080 ($340 per month) in advance. Sep. 21 Tony conducts a rock-climbing clinic. The company receives $13,900 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 $18,200 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. The first team in each category to complete all checkpoints in order wins. The entry fee for each team is $580. 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. 8 The company pays $1,300 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 $2,100 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. Dec. 15 The company receives $23,200 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 $3,900 ($1,950 to Tony and $1,950 to Suzie). Dec. 31 Using his personal money, Tony purchases a diamond ring for $4,200. 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 $5,860. 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 $1,700 of office supplies purchased on July 4, $240 remains. e. Interest expense on the $44,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,100 of racing supplies purchased on December 12, $110 remains. g. Suzie calculates that the company owes $14,900 in income taxes. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Date Jul 01, 2021 Jul 01, 2021 Jul 01, 2021 Jul 02, 2021 Jul 04, 2021 Jul 07, 2021 Jul 08, 2021 Jul 15, 2021 Jul 22, 2021 Jul 24, 2021 Jul 30, 2021 Aug 01, 2021 Aug 04, 2021 Aug 10, 2021 Aug 17, 2021 Aug 24, 2021 Cash Common Stock Common Stock Prepaid Insurance Cash Legal Fees Expense Cash Supplies (Office) Cash Accounts Payable Advertising Expense Cash Equipment (Bikes) Cash Cash Service Revenue (Clinic) Service Revenue (Clinic) Cash Advertising Expense Cash Deferred Revenue Notes Payable Equipment (Kayaks) Cash Cash Deferred Revenue Cash Cash Service Revenue (Clinic) Service Revenue (Clinic) Cash General Journal Accounts Payable Cash 00 oo O 30 OO O O ** 00 oo ** ** oo O *** 00 00 Debit 15,500 15.500 4,920 1,500 1,700 350 12,500 2,500 3,100 830 7,200 44,000 16,800 3,400 7,200 12.200 1,700 Credit 15,500 15,500 4,920 1,500 1,700 350 12.500 2,500 3,100 830 7,200 44,000 16,800 10,600 12.200 1,700 > O 6 S 3 19 9 3 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Sep 01, 2021 Sep 21, 2021 Oct 17, 2021 Dec 01, 2021 Dec 05, 2021 Dec 08, 2021 Dec 12, 2021 Dec 15, 2021 Dec 16, 2021 Dec 31, 2021 Dec 31, 2021 Dec 31, 2021 Dec 31, 2021 Dec 31, 2021 Dec 31, 2021 Dec 31, 2021 Dec 31, 2021 Prepaid Rent Cash Cash Service Revenue (Clinic) Cash Service Revenue (Clinic) No Journal Entry Required No Journal Entry Required Miscellaneous Expense Cash Supplies (Racing) Accounts Payable Cash Service Revenue (Racing) Salaries Expense Cash Dividends Cash No Journal Entry Required Depreciation Expense Accumulated Depreciation Insurance Expense Prepaid Insurance Rent Expense Prepaid Rent Supplies Expense (Office) Supplies (Office) Interest Expense Interest Payable Supplies Expense (Racing) Supplies (Racing) 4,080 13,900 18,200 1,300 2,100 23,200 O 2,000 3,900 5,860 2,460 1,360 1,460 1,100 1,990 ** > 30 30 30 33 30 3 00 33 30 00 S 30 4,080 13,900 18,200 1,300 2,100 23,200 2,000 3,900 5,860 2,460 1,360 1,460 1,100 1,990 33 34 35 36 37 Dec 31, 2021 Dec 31, 2021 Dec 31, 2021 Dec 31, 2021 Dec 31, 2021 Supplies Expense (Racing) Supplies (Racing) Income Tax Expense Income Taxes Payable Service Revenue (Clinic) Service Revenue (Racing) Salaries Expense Rent Expense Insurance Expense Supplies Expense (Office) Supplies Expense (Racing) Advertising Expense Legal Fees Expense Depreciation Expense Miscellaneous Expense Interest Expense Income Tax Expense Cash 1,990 14,900 2,000 1,360 2,460 1,460 1,990 1,180 1,500 5,860 1,300 1,100 14,900 108,820 1,990 14,900 240 110 X X X X Post-closing Revenues: Service Revenue (Clinic) Service Revenue (Racing) Total Revenues Salaries Expense Rent Expense Insurance Expense Supplies Expense (Office) Supplies Expense (Racing) Advertising Expense Legal Fees Expense Depreciation Expense Miscellaneous Expense Advertising Expense Interest Expense Income Tax Expense Total Expense Expenses: Net Income GREAT ADVENTURES, Inc. Income Statement December 31, 2021 44 60,740 23,310 4,000 2,720 4,920 2,920 3,980 2,360 3,000 11,720 2,600 2,360 2,200 29,800 $ 69 $ 84,050 72,580 11,470 Post-closing Balance at December 31 Add: Issuance of Common Stock Add: Net Income for 2021 Less: Dividends Balance at December 31 GREAT ADVENTURES, Inc. Statement of Stockholders' Equity For the year ended December 31, 2021 Common Stock 0 31,000 31,000 $ $ Retained Earnings 0 11,470 (3,900) 7,570 Total Stockholders' Equity 31,000 11,470 (3,900) 38,570 Post-closing Current Assets: Cash Supplies (Office) Supplies (Racing) Prepaid Rent Prepaid Insurance Assets Total Current Assets Long-term assets: Equipment (Bikes) Equipment (Kayaks) Accumulated Depreciation Total Assets 40003 3 GREAT ADVENTURES, Inc. Balance Sheet December 31, 2021 217,640 240 110 2,720 2,460 223,170 12,500 16,800 (5,860) 0 246,610 Current Liabilities: Liabilities Accounts Payable Income Taxes Payable Interest Payable Notes Payable Total Current Liabilities Total Liabilities Notes Payable Stockholders' Equity Common Stock Retained Earnings Additional Paid-in Capital Total Stockholders' Equity Total Liabilities and Stockholders' Equity X 2,100 14,900 1,100 44,000 62,100 44,000 106,100 31,000 7,570 0 38,570 144,670

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