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 20,000 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 $10,000 of common stock to Susie. Jul. 1 Soll $10,000 of common stock to Tony. ul. i Purchase a one-year insurance policy for $4,000 (5400 per month) to caver injuries to particirants during outdoor clinics. Jul. 2 Pay legal toes of $1,500 associated with incorporation Jal. 4 Purchase office supplies of $1,800 on account. Jul. 7 Pay for advertising of $300 to a local bowepaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged 550 on the day of the elinie. Jul. # Purchase 10 mountain bikes, paying $12,000 cash. Jul. 15 on the day of the alinie, Great Adventures receives cash of $2,000 from 40 bikers. Tony conduct the mountain biking clinic. Jul. 22 Decause of the success of the first muntain biking cline, Tony bolde another mountain biking clinic and the company Jul. 24 Pay $700 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendeen can pay $100 in advance or $150 on the day of the clinic. Jul. 30 Great Adventures receves cash of $4,000 in advance from 40 kayakers for the upcoming Kayak clinic. Aug. 1 Great 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 67 annual interest is due each year on July 31. Aug. 4 The company purchases 14 kayaks, paying $28,000 cash. Aug. 10 Twenty additional kayakers pay $3.000 (5150 each). In addition to the $4,000 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak elinie. Aug. 17 Tony conducts a second kayak clinic, and the company receives $10,500 cash. Aug. 24 Office supplies of $1,800 purchased on July 4 are paid in full Ch 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 $2.400 ($200 per month) in advance. Sep. 21 Tony conducts a rock-climbing olinie. The company receives $13,200 cash. Oct. 17 Tony conducts an orienteering elinie. Participants practice how to understand a topographical map, read an altimeter, una compass, and orient through heavily wooded areas. The company receives $17,900 cash. bee. 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 tee for each team is $500. 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. Itis salary will be paid after the Dec. The company pays $1,200 to purchase a permit from a state park where the race will sold. The amount is recorded as a miscellaneous expense. Dec. 12 The company purchases racing supplies for $2,800 on account due in 30 days. Supplies include trophies for the top-finishing team in each category, promotional shirts, snack foods and drinks for participants, and tield markers to prepare the racecourse. Dec. 15 The company receives $20,000 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 $4,000 ($2,000 to Tony and $2,000 to Sunie). Dec. 1 Doing his personal money, Tony purchases a diamond ring for $4,500. Tony surprises suute by proponing 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 $8.000, b. Six months of the one-year insurance policy purchased on July 1 has expired. Four months of the one-year rental agreement purchased on September 1 has expired. d. Of the $1.800 of office supplies purchased on July 4, $300 remains. e Interest expense on the $30,000 loan obtained from the city council on August 1 should be recorded. for the $2,800 of racing supplies purchased on December 12, $200 remains g. Suzie calculates that the company owes $14.000 in income taxes. Prey 1 of 13 !!! Next > 16 sty 1 w 9 A Assets Current assets: Cash 2,800 0 1 0 GREAT ADVENTURES, Inc. Balance Sheet December 31, 2021 Liabilities Current liabilities: 64,200 Accounts Payable 01 4,600 0 2,400 Total current liabilities 4,800 76,000 Total liabilities: Stockholders' Equity 12,000 Common Stock 28,000 0 Retained Earnings 0 Total stockholders' equity $ 116,000 Total liabilities and stockholders' equity 0 2,800 Supplies (Office) Supplies (Racing) Prepaid Rent Prepaid Insurance Total current assets Long-term assets: Equipment (Bikes) Equipment (Kayaks) Accumulated Depreciation 0 2.800 12 20,000 46,000 66,000 68,800 $ Total assets 16 sty 1 w 9 A Assets Current assets: Cash 2,800 0 1 0 GREAT ADVENTURES, Inc. Balance Sheet December 31, 2021 Liabilities Current liabilities: 64,200 Accounts Payable 01 4,600 0 2,400 Total current liabilities 4,800 76,000 Total liabilities: Stockholders' Equity 12,000 Common Stock 28,000 0 Retained Earnings 0 Total stockholders' equity $ 116,000 Total liabilities and stockholders' equity 0 2,800 Supplies (Office) Supplies (Racing) Prepaid Rent Prepaid Insurance Total current assets Long-term assets: Equipment (Bikes) Equipment (Kayaks) Accumulated Depreciation 0 2.800 12 20,000 46,000 66,000 68,800 $ Total assets