Tony Matheson plans to graduate from college in May 2012 after spending four years earning a degree in sports and recreation management. Since beginning T-ball at age five, he's been actively involved in sports and enjoys the outdoors. Each summer growing up, he and his father would spend two weeks at a father/son outdoor camp.
These fond memories are part of the reason he chose his major. He wants to remain involved in these outdoor activities and provide others with the same adventures he was able to share with his dad. He decides to start an outdoor adventure company.
However, he's not sure he has the business background necessary to do this. This is where Suzie Ramos can help. Suzie also plans to graduate in May 2012 with a major in business. Suzie and Tony first met their sophomore year and have been friends ever since as they share a strong interest in sports and outdoor activities. They decide to name their company Great Adventures. They will provide clinics for a variety of outdoor activities such as kayaking, mountain biking, rock climbing, wilderness survival techniques, orienteering, backpacking, and other adventure sports.
Required:
1. What are the three primary forms of business organizations Tony and Suzie might choose for Great Adventures? Explain the advantages and disadvantages of each. Which form do you recommend for Great Adventures?
2. Discuss some of the typical financing, investing, and operating activities that a company like Great Adventures is likely to have.
3. What specific account names for assets, liabilities, stockholders' equity, revenues, and expenses would the company likely use to record its business transactions?
4. To report company performance, Suzie plans to prepare the four primary financial statements? Explain the type of information provided by each statement.