Tony and Suzie graduate from college in May 2024 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, 2024, Tony and Suzie organize their new company as a corporation, Great Adventures Incorporated The articles of incorporation state that the corporation will sell 34,000 shares of common stock for $1 each. Each share of stock represents a unit bf ownership. Tony and Suzie will act as co-presidents of the company. The following business activities occur during July for Great Adventures. July 1 Sell $17,000 of common stock to Suzie. July 1 Sell $17,000 of common stock to Tony. July 1 Purchase a one-year insurance policy for $4,440 ( $370 per nonth) to cover injuries to July participants during outdoor clinics. July 4 Pay legal fees of $1,490 associated with incorporation. July 7 Purchase office supplies of $1,700 on account. Pay $300 to a local newspaper for advertising to appear immediately for an upcoming mountain biking clinic to be held on July 15 . Attendees will be charged $50 the day of the clinic. Purchase 10 mountain bikes, paying $18,200 cash. On the day of the clinic, Great Adventures receives cash of $4,000 in total from 80 bikers. Tony and Suzie conducts the mountain biking clinic. Because of the success of the first mountain biking clinic, Tony and Suzie holds another mountain biking clinic and the conpany receives $4,400. Pay $750 to a local radio station for advertising to appear imediately. A kayaking clinic witl be held on August 10 , and attendees can pay $100 in advance or $150 on the day of the clinic. Great Adventures receives totat cash of $7,000 in advance from 70 kayakers for the upcoming kayak clinic. The following transactions occur over the renainder of 2024 , August 1 Great Adventures obtains a $42,000 low-interest loan the cospany 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 68 annual interest is due each year on July 31. The company purchases 14 kayaks, paying 519,500 cash. Tony and Suzie conduct the first kayak clinic. In addition to the $7,000 that was received in advance from kayakers on July 30 , the company receives additional cash of $3,000 from twenty new kayakers on the day of the clinic. Tony and Suzie conducts a second kayak clinic, and the company receives $12,500 cash. office supplies of $1,700 purchased on July 4 are paid in fult. To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $3,480 ( $290 per month) in advance. August 4 August 17 August 24 September 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a September 21 Tony and Suzie conduct a rock-climbing clinic. The company receives $13,600 cash. storage shed for one year, paying $3,480 ( $290 per month) in advance. Septenber 21 Tony and Suzie conduct a rock-climbing clinic. The conpany receives $13,600 cash. october 17 Tony and Suzie conduct an orienteering ctinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily wooded areas. The company receives $18,000 cash. December 1 Tony and Suzie decide 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. orientecring, trail running, and rock-climbing skills. The first team in each category to conplete all' checkpoints in order wins. The entry fee for each tean is $690. December 5 To belp organize and promote the race, Tony hires his college roomeate, victor. Victor will be paif $50 in salary for each team that conpetes in the race. His salary will be paid after the race. Decenber 8 The company pays $1,200 to purchase a perait from a state park where the race will be held. The anount is recorded as a miscellaneous expense. Decenber 12 The company purchases racing supplies for $2,400 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. December 15 The company receives $27,600 cash from a total of forty teams, and the race is held. Decenber 16 The company pays Victor's salary of $2,000. December 31 The company pays a dividend of $4,700 ( $2,350 to Tony and $2,350 to Suzie). December 31 Using his personal money. Tony purchases a dianond ring for $4,200. Tony surprises suzie by proposing that they get married. Suzie accepts and they get narried! The following information relates to year-end adjusting entries as of December 31, 2024. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,600. b. Six month's 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,$360 remains. e. Interest expense on the $42,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,400 of racing supplies purchased on December 12,$180 remains. 9. Suzie calculates that the company owes $13,200 in income taxes. For the period July 1 to December 31, 2024, prepare an income statement. \begin{tabular}{|l|l|l|l|} \hline \multicolumn{5}{|c|}{ GREAT ADVENTURES, INCORPORATED } \\ \hline \multicolumn{5}{|c|}{ Statement of Stockholders' Equity } \\ \hline For the Period Ended December 31, 2024 \\ \hline & Common Stock & \begin{tabular}{c} Retained \\ Earnings \end{tabular} & \begin{tabular}{c} Total \\ Stockholders' \\ Equity \end{tabular} \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline \end{tabular} Prepare a classified balance sheet as of December 31, 2024. (Amounts to be deducted should be indicated by a minus sign.) GREAT ADVENTURES, INCORPORATED \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ Balance Sheet } \\ \hline \multicolumn{4}{|c|}{ December 31, 2024} \\ \hline Assets & & Liabilities & \\ \hline Current Assets: & & Current Liabilities: & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & Total Current Liabilities & 0 \\ \hline & & & \\ \hline Total Current Assets & 0 & Total Liabilities & 0 \\ \hline Long-term Assets: & & Stockholders' Equity & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & Total Stockholders' Equity & 0 \\ \hline Total Assets & 0 & Total Liabilities and Stockholders' Equity & \$ \\ \hline \end{tabular}