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 37,000 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 unadjusted trial balance as of July 31 (Chapter 2 Homework), the end of the first months operations is presented below Great Adventures Unadjusted Trial Balance July 31, 2021 CR DR Account Cash 30,590 Accounts Receivable 2.000 Prepaid Insurance Supplies-Office Equipment-Bikes Accounts Payable Deferred Revenue 4,920 1,900 11,900 1,900 11,200 Common Stock Service Revenue 37,000 3,600 Advertising Expense Legal Fees Expense 1,090 1,300 Totals 53,700 53,700 The following transactions took place during the remainder of 2021. Note the beginning balances from the July transactions (Ch 2 Homework) have already been loaded into the ledger Aug 1Great Adventures obtains a $30,000 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 4 The company purchases 14 kayaks, paying $40,320 cash in total. 10 Twenty kayakers pay $3,800 (S190 each) for the kayak clinic on the day of the clinic. Tony conducts the first kayak clinic Aug Aug. Aug. Aug Aug. 12 Collected $2,000 on account from the July clinic, 17 Tony conducts a second kayak clinic, and the company receives $10,500 cash. 24 Paid for the supplies purchased on account on July 4 (Chapter 2 Homework) in full, $1,900. 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $2,400 ($200 per month) in advance. 21 Tony conducts a rock-climbing clinic. The company bills the clients $13,200 for the provided clinic due in 30 days. Sep. Sep. Sep Oct 21 Tony conducts a rock-climbing clinic. The company bills the clients $13,200 for the provided clinic due in 30 days 17 Paid the local radio station $1,200 for advertising Great Adventures for the remainder of October 20 Collected 80% of the amount due from customers from the September 21 rock-climbing clinic 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 will be $500 Oct 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 $1.200 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense 12 The company purchases racing supplies for $2,800 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 15 The company receives $20,000 cash from a total of forty teams for the adventure race, and the race is held. 16 The company pays Victor's salary (ignore any taxes) 31 The company pays a dividend of $4,000 ($2,000 too Tony and $2,000 to Suzie) 31 Using his personal money, Tony purchases a diamond ring for $4,500. Tony surprises Suzie by proposing that they get married. Suzie accepts and they get married! Dec Dec. Dec Dec Dec. Dec. The following information relates to year-end adjusting entries as of December 31, 2021. a. Depreciation of the mountain bikes purchased on July 8 was $1,190 and kayaks purchased on August 4 was $5,600. b. Record any necessary adjustment for the one-year insurance policy purchased on July 1 c. Prepare any necessary adjustment for the one-year rental agreement purchased on September 1. d. Record any necessary adjustment for the deferred revenue from July, all of the revenue was earned at the August 10 clinic e. Of the $1,900 of office supplies purchased in July (Chapter 2 Homework), $300 remains f. Interest expense on the $30,000 loan obtained from the city council on August 1 should be recorded. g. Of the $2,800 of racing supplies purchased on December 12, $200 remains h. Suzie calculates that the company owes $14,000 in income taxes. Instructions Record the daily transactions in the Journal Daily tab Post the daily transactions to the Ledger Record the necessary adjusting entries in the Journal Adjusting tab Post the adjusting entries to the ledger 1) 2) 3) 4) Create an Adjusted Trial Balance Create an income statement, statement of shareholders' equity, and a balance sheet Record the closing entries in the Journal Closing tab and Post to the ledger. Ensure all temporary accounts have a zero balance 5) 6) 7)