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 chckpoint 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 28,000 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. July 1 Sell $14,900 of comnon stock to Suzie. July 1 Sell 814,690 of comnon stock to Tony. July 1 Purchase a one year insurance policy for $5,640 (\$470 per month) to cover injuries to participants during outdoor clinics. July 2 Pay legal fees of $1,999 associated with incorporation. July 4 Purchase office supplies of $1,600 on account. July 7 Pay $260 to a local newspaper for advertising to appear imsediately for an upconing nountain biking clinic to be held on July 15. Attendees will be charged $3 the day of the clinic. July 8 Purchase 10 nountain bikes, paying $14,500 cash. July 15 On the day of the clinic, Great Adventures receives cash of $2,100 in total from 70 bikers. Tony and 5uzi= July 22 Because of the success of the first mountain biking clinic, rony and suzie holds another mountain biking July 24 Pay $760 to a local radio station for advertising to appear innediately. A kayaking clinic will be held on August 10, and attendees can pay $120 in advance or $170 on the day of the clinic. July 30 Great Adventures receives total cash of $9,600 in advance from 80 kayakers for the upcoming kayak elinic. The following transactions occur over the renainder of 2024 . August 1 Great Adventures obtains a \$35,000 low-interest loan for the company fron the city counci1, which has recently passed an initiative encouraging business develogment related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31. August: A The conpany purchases 14 kayaks, paying $22,400 cash. August 10 Tony and Suzie conduct the first kayak clinic. in addition to the 50,600 that was received in advance from kayakers on July 30 , the company receives additional cash of $3,400 fron thenty new kayakers on the day of the clinic. August 17 Tony and Suzie conducts a second kayak clinic, and the company receives $10,500 cash. August 24 office supplies of $1,60 purchased on July 4 are paid in full. Septenber 1 To provide better storage of mountain bikes and kayaks when not in use, the conpany rents a storage shed for one year, paying $3,000 ( $250 per month) in advance. September 21 Tony and Suzie conduct a rock-climbing clinic. The company receives $13,600 cash. October 17 Tony and Suzie conduct an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a coepass, and orient through heavily wooded areas. The company receives $18,200 cash. December 1 Tony and Suzie decide to hold the company's first adventure race on Deceaber 15. Four-person teaas will race froo checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-clibbing skills. The first tean in each category to conplete all checkpoints in order wins. The entry fee for each tean is $550. December 5 To help organize and promote the race, Tony hires his college rooenate, Victor. Victor will be paid sje in salary for each team that competes in the race. His salary will be paid after the race. December 8 The coepany pays $1,900 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense. December 12 The company. purchases racing supplies for. $2,900 on account due in 30 days. Supplies include trophies for the top-finishing teans in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse. December 15 The company receives 322,000 cash from a total of forty teans, and the race is held. Decenber 16 The company pays Victor's salary of $1,200. December 31 The company pays a dividend of $4,360 ( $2,150 to tony and $2,150 to surie). December 31 using his personal money, Tony purchases a diamond ring for $4,100. 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 31,2024. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7.600. b. Six monthis' 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 $1,600 of office supplies purchased on July 4,$370 remains. e. Interest expense on the $35,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2.900 of racing supplies purchased on December 12.$150 remains. g. Suzie calculates that the company owes $14,300 in income taxes Record closing entries as of December 31,2024 and post them to the T-accounts in Req 3 and 7 . (If no entry is required for a ansaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Note: Enter debits before credits. 6. Record closing entries as of December 31, 2024 and post them to the T-accounts in Req 3 and 7 . (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the entry to close the expense accounts. Note: Enter detonts before credits. 6. Record closing entries as of December 31, 2024 and post them to the T-accounts in Req 3 and 7 . (If no entry is required transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the entry to close the dividends account. Note: Enter debits before credits. 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 chckpoint 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 28,000 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. July 1 Sell $14,900 of comnon stock to Suzie. July 1 Sell 814,690 of comnon stock to Tony. July 1 Purchase a one year insurance policy for $5,640 (\$470 per month) to cover injuries to participants during outdoor clinics. July 2 Pay legal fees of $1,999 associated with incorporation. July 4 Purchase office supplies of $1,600 on account. July 7 Pay $260 to a local newspaper for advertising to appear imsediately for an upconing nountain biking clinic to be held on July 15. Attendees will be charged $3 the day of the clinic. July 8 Purchase 10 nountain bikes, paying $14,500 cash. July 15 On the day of the clinic, Great Adventures receives cash of $2,100 in total from 70 bikers. Tony and 5uzi= July 22 Because of the success of the first mountain biking clinic, rony and suzie holds another mountain biking July 24 Pay $760 to a local radio station for advertising to appear innediately. A kayaking clinic will be held on August 10, and attendees can pay $120 in advance or $170 on the day of the clinic. July 30 Great Adventures receives total cash of $9,600 in advance from 80 kayakers for the upcoming kayak elinic. The following transactions occur over the renainder of 2024 . August 1 Great Adventures obtains a \$35,000 low-interest loan for the company fron the city counci1, which has recently passed an initiative encouraging business develogment related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31. August: A The conpany purchases 14 kayaks, paying $22,400 cash. August 10 Tony and Suzie conduct the first kayak clinic. in addition to the 50,600 that was received in advance from kayakers on July 30 , the company receives additional cash of $3,400 fron thenty new kayakers on the day of the clinic. August 17 Tony and Suzie conducts a second kayak clinic, and the company receives $10,500 cash. August 24 office supplies of $1,60 purchased on July 4 are paid in full. Septenber 1 To provide better storage of mountain bikes and kayaks when not in use, the conpany rents a storage shed for one year, paying $3,000 ( $250 per month) in advance. September 21 Tony and Suzie conduct a rock-climbing clinic. The company receives $13,600 cash. October 17 Tony and Suzie conduct an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a coepass, and orient through heavily wooded areas. The company receives $18,200 cash. December 1 Tony and Suzie decide to hold the company's first adventure race on Deceaber 15. Four-person teaas will race froo checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-clibbing skills. The first tean in each category to conplete all checkpoints in order wins. The entry fee for each tean is $550. December 5 To help organize and promote the race, Tony hires his college rooenate, Victor. Victor will be paid sje in salary for each team that competes in the race. His salary will be paid after the race. December 8 The coepany pays $1,900 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense. December 12 The company. purchases racing supplies for. $2,900 on account due in 30 days. Supplies include trophies for the top-finishing teans in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse. December 15 The company receives 322,000 cash from a total of forty teans, and the race is held. Decenber 16 The company pays Victor's salary of $1,200. December 31 The company pays a dividend of $4,360 ( $2,150 to tony and $2,150 to surie). December 31 using his personal money, Tony purchases a diamond ring for $4,100. 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 31,2024. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7.600. b. Six monthis' 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 $1,600 of office supplies purchased on July 4,$370 remains. e. Interest expense on the $35,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2.900 of racing supplies purchased on December 12.$150 remains. g. Suzie calculates that the company owes $14,300 in income taxes Record closing entries as of December 31,2024 and post them to the T-accounts in Req 3 and 7 . (If no entry is required for a ansaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Note: Enter debits before credits. 6. Record closing entries as of December 31, 2024 and post them to the T-accounts in Req 3 and 7 . (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the entry to close the expense accounts. Note: Enter detonts before credits. 6. Record closing entries as of December 31, 2024 and post them to the T-accounts in Req 3 and 7 . (If no entry is required transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the entry to close the dividends account. Note: Enter debits before credits
