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 39,000 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 $19,569 of connon stock to Suzie. July 1 Sell $19,590 of comon stock to Tony. July 1 Purchase a one-year insurance policy for $4,689 (\$340 per month) to cover injuries to participants during outdoor elinics. July 2 Pay legal fees of $1,090 associated with incorporation. July 4 Purchase office supplies of $1,700 on account. July 7 Pay $460 to a local newspaper for advertising to appear imediately for an upeoning mountain biking clinie to be held on July 15. Attendees will be charged $50 the day of the clinic. July b Purchase 10 mountain bikes, paying $11,599 cash. July 15 On the day of the clinic, Great Adventures receives cash of 52,590 in total from 50 bikers, Tony and July 22 Suzie conducts the nountain biking clinic. Because of the success of the first mountain biking clinic, tony and Suzie holds another nountain biking July 24 Pay 5950 to a local radio station for advertising to appear imediately. A kayaking clinic mill be held July 36 on August 16 , and attendees can pay $140 in advance or $190 on the day of the clinic. The followelndreat Adventures receives total cash of $8,400 in advance fron 60 kayakers for the upcoming kayak clinle. August 1 . 1 owing transactions occur over the remainder of 2024 Great Mdventures obtains a 544,000 low-interest loan for the company fron the city councli, which has recently passed an initlative encouraging business developent related to outdoor activitles. The loan is due in three years, and 65 annual interest is due each year on Joly 31. August 4 The conpany purchases 14 kayaks, paying $16, 490ag cash. August 10 Tony and Suzie conduct the first kayak clinic. In addition to the 58 , 4e0 that was received in advance. from koyakers on July 3e, the company receives additional cash of 53 , d00 from twenty nem kayakers on the day of the clinic. August 17 Tony and suzie conducts a second kayak clinic, and the company receives $11, 200 cash. August 24 office supplies of $1,709 purchosed on July 4 are paid in full. September 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed tor one year, paying $4,030 ( $340 per month) in advance. Septenber 21 Tony and suzie conduct a rock-climbing clinic. The conpany receives $14, 100 cash. October 17 Tony and Suzie conduct an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily mooded areas. The company receives December 1 Tony and Suzie decide to hold the company's first adventure race on Decenber 15. Four-person teans wil1 race froa checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-climbing skills. The first: tean in each category to conplete all checkpoints in order mins. The entry fee for each team is $539. December 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid 540 in salary for each tean that competes in the race. His salary will be paid after the race. December 8 The company pays $1,700 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 comany purchases racing supplies for $2,460 on account due in wa days. Supplies Include trophies for the top-finishing teans in each category, pronotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse. December 15. The company receives $21,200 cash from a total of forty teams, and the race is held. December 16 The company pays Victor" 5 salary of $1,600. December 31 The company pays a dividend of $4,909($2,450 to tony and $2,459 to 54zie). December 31. Using his personal money. Tony purchases a diamond ring for \$4, 900 . Tony surprises 5uzie 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 $8,900. b. Six months' 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,$370 remains. e. Interest expense on the $44,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,400 of racing supplies purchased on December 12,$100 remains. 9. Suzie calculates that the company owes $13,000 in income taxes. 8. Prepare a post-closing trial balance as of December 31,2024. \begin{tabular}{|l|l|l|} \hline Retained Earnings & & \\ \hline Dividends & & \\ \hline Service Revenue (Clinic) & & \\ \hline Service Revenue (Racing) & & \\ \hline Advertising Expense & & \\ \hline Depreciation Expense & & \\ \hline Income Tax Expense & & \\ \hline Insurance Expense & & \\ \hline Interest Expense & & \\ \hline Legal Fees Expense & & \\ \hline Miscellaneous Expense & & \\ \hline Rent Expense & & \\ \hline Salaries Expense & & \\ \hline Supplies Expense (Office) & & \\ \hline Supplies Expense (Racing) & & \\ \hline Totals & $ & $ \\ \hline \end{tabular} 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 39,000 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 $19,569 of connon stock to Suzie. July 1 Sell $19,590 of comon stock to Tony. July 1 Purchase a one-year insurance policy for $4,689 (\$340 per month) to cover injuries to participants during outdoor elinics. July 2 Pay legal fees of $1,090 associated with incorporation. July 4 Purchase office supplies of $1,700 on account. July 7 Pay $460 to a local newspaper for advertising to appear imediately for an upeoning mountain biking clinie to be held on July 15. Attendees will be charged $50 the day of the clinic. July b Purchase 10 mountain bikes, paying $11,599 cash. July 15 On the day of the clinic, Great Adventures receives cash of 52,590 in total from 50 bikers, Tony and July 22 Suzie conducts the nountain biking clinic. Because of the success of the first mountain biking clinic, tony and Suzie holds another nountain biking July 24 Pay 5950 to a local radio station for advertising to appear imediately. A kayaking clinic mill be held July 36 on August 16 , and attendees can pay $140 in advance or $190 on the day of the clinic. The followelndreat Adventures receives total cash of $8,400 in advance fron 60 kayakers for the upcoming kayak clinle. August 1 . 1 owing transactions occur over the remainder of 2024 Great Mdventures obtains a 544,000 low-interest loan for the company fron the city councli, which has recently passed an initlative encouraging business developent related to outdoor activitles. The loan is due in three years, and 65 annual interest is due each year on Joly 31. August 4 The conpany purchases 14 kayaks, paying $16, 490ag cash. August 10 Tony and Suzie conduct the first kayak clinic. In addition to the 58 , 4e0 that was received in advance. from koyakers on July 3e, the company receives additional cash of 53 , d00 from twenty nem kayakers on the day of the clinic. August 17 Tony and suzie conducts a second kayak clinic, and the company receives $11, 200 cash. August 24 office supplies of $1,709 purchosed on July 4 are paid in full. September 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed tor one year, paying $4,030 ( $340 per month) in advance. Septenber 21 Tony and suzie conduct a rock-climbing clinic. The conpany receives $14, 100 cash. October 17 Tony and Suzie conduct an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily mooded areas. The company receives December 1 Tony and Suzie decide to hold the company's first adventure race on Decenber 15. Four-person teans wil1 race froa checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-climbing skills. The first: tean in each category to conplete all checkpoints in order mins. The entry fee for each team is $539. December 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid 540 in salary for each tean that competes in the race. His salary will be paid after the race. December 8 The company pays $1,700 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 comany purchases racing supplies for $2,460 on account due in wa days. Supplies Include trophies for the top-finishing teans in each category, pronotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse. December 15. The company receives $21,200 cash from a total of forty teams, and the race is held. December 16 The company pays Victor" 5 salary of $1,600. December 31 The company pays a dividend of $4,909($2,450 to tony and $2,459 to 54zie). December 31. Using his personal money. Tony purchases a diamond ring for \$4, 900 . Tony surprises 5uzie 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 $8,900. b. Six months' 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,$370 remains. e. Interest expense on the $44,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,400 of racing supplies purchased on December 12,$100 remains. 9. Suzie calculates that the company owes $13,000 in income taxes. 8. Prepare a post-closing trial balance as of December 31,2024. \begin{tabular}{|l|l|l|} \hline Retained Earnings & & \\ \hline Dividends & & \\ \hline Service Revenue (Clinic) & & \\ \hline Service Revenue (Racing) & & \\ \hline Advertising Expense & & \\ \hline Depreciation Expense & & \\ \hline Income Tax Expense & & \\ \hline Insurance Expense & & \\ \hline Interest Expense & & \\ \hline Legal Fees Expense & & \\ \hline Miscellaneous Expense & & \\ \hline Rent Expense & & \\ \hline Salaries Expense & & \\ \hline Supplies Expense (Office) & & \\ \hline Supplies Expense (Racing) & & \\ \hline Totals & $ & $ \\ \hline \end{tabular}
