Tony and Suzie graduate from college in May 2018 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, 2018, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 33,000 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 business activities occur during July for Great Adventures. Jul. 1 Sell $16.500 of common stock to Suzie. Jul. 1 Sell $16,500 of common stock to Tony Jul. 1 Purchase a one-year insurance policy for $3,840 ($320 per month) to cover injuries to participants during outdoor clinics Jul. 2 Pay legal fees of $1,100 associated with incorporation. Jul. 4 Purchase office supplies of $1,400 on account. Jul. 7 Pay for advertising of $380 to a local newspaper for an upcoming mountain biking clinic to be held on July 15 Attendees will be charged $30 the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $10,400 cash. Jul. 15 On the day of the clinic, Great Adventures receives cash of $1,200 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 $1.650. Jul. 24 Pay for advertising of $830 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 day of the clinic. Jul. 30 Great Adventures receives cash of $7.000 in advance from 70 kayakers for the upcoming kayak clinic. Prepaid Insurance 3,840 July 1 July 15 July 22 July 30 Cash 1,200 1,650 7,000 End, bal 3,840 End, bal Supplies 1,400 Equipment 10,400 July 4 July 8 End, bal 1,400 End, bal 10,400 Accounts Payable Deferred Revenue End, bal End, bal Service Revenue T Common Stock 16.500 July 1 Preu Next > Accounts Payable Deferred Revenue End, bal. End, bal Common Stock Service Revenue 16,500 July 1 16,500 July 1 End, bal 33,000 End, bal Advertising Expense 380 Legal Fees Expense 1,100 July 2 July 7 July 24 830 End, bal. 1.210 End, bal. 1.100
