Great Adventures Problem 3-1 The articles of incorporation state that the corpor
ID: 2392598 • Letter: G
Question
Great Adventures Problem 3-1 The articles of incorporation state that the corporation will sell 35,000 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 Jul. 1 Sell $17,500 off common stock to Suzie Jul. 1 Sell $17.500 of common stock to Tony Jul 1 Jul 2 Pay legal fees of $1600 associated with incorporation Jul 4 P Jul. 7 Pay for Jul. 8 Purchase 10 mountain bikes, paying $18,000 cash. Jul. 15 On the day of the clinic, Great Jul. 22 B ut 24 Pay for advertising of S780 to local rad? Staton for a keyaking cine to be held on August 10 Attendees cen pay S130 in advance or $180 on the day of the dnic. Jul. 30 Great a one-year insurance policy for $3,960 ($330 per month) to cover es to perticipents e office supplies of $1,500 on account of $320 to a local newspeper for an upcoming mountain biking clinic to be will be charged $60 the day of the clinic s receives cash of $3.000 from 50 bikers Tony conducts the mountan bking clinic biking clinic, Tony holds another mounten biking cinic and the c loan for the comparny from the city council, which hes recently pessed an initiative encoureging business development related to outdoor ectivites The loan is due in three years and 6% annual interest is due each year on July 31 Aug. 4 The company Aug. 10 Twenty a Aug 17 Tony conducts a second kayak clinic, and the compeny receives $11,800 cash Aug 24 Office supplies of $1,500 purchased on July 4 are paid in full. Sep. 1 To Sep 21 Tony conducts a Oct 17 Tony conducts an orienteering clinic. Participants practice how to 14 kayaks, paying $18,700 cash pay $3,600 ($180 each), in eddition to the $10,400 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic bing clinic. The company receives $14,200 cash 811 PM 6/25/2018Explanation / Answer
Great Adventure Inc. General Journal Date Journal Amount (DR) Amount (CR) 01-Jul Cash $ 17,500.00 To Common Stock $ 17,500.00 (Being sell common stock to Suzie 01-Jul Cash $ 17,500.00 To Common Stock $ 17,500.00 (Being sell common stock to Tony) 01-Jul Prepaid Insurance $ 3,960.00 To Cash $ 3,960.00 (Being amount of Insurance purchased ) 02-Jul Legal Fees $ 1,600.00 To Cash $ 1,600.00 (Being amount of legal fees paid ) 04-Jul Office Supplies $ 1,500.00 To Accounts Payable $ 1,500.00 (Being amount of office supplies purchased on account) 07-Jul Advertisement Expenses $ 320.00 To Cash $ 320.00 (Being amount paid for advertisement in newspaper) 08-Jul Equipments $ 18,000.00 To Cash $ 18,000.00 (Being amount of purchased of 10 mountain bikes) 15-Jul Cash $ 3,000.00 To Service Revenue $ 3,000.00 (Being amount received from 80 Bikers) 22-Jul Cash $ 3,400.00 To Service Revenue $ 3,400.00 (Being amount received for service revenue 24-Jul Advertisement Expenses $ 780.00 To Cash $ 780.00 (Being amount paid for advertisement in Radio) 30-Jul Cash $ 10,400.00 To deferred Revenue $ 10,400.00 (Being amount of advance received from 50 Kayakers for upcomin Kayak clinic) 01-Aug Cash $ 37,000.00 To Loan $ 37,000.00 (Being amount of loan taken from City Counsil) 04-Aug Equipments $ 18,700.00 To Cash $ 18,700.00 (Being amount paid for purchased of Kayaks) 10-Aug Cash $ 3,600.00 To Deferred Revenue $ 3,600.00 (Being amount received as advance from 20 Kayaks) 17-Aug Cash $ 11,800.00 To Service Revenue $ 11,800.00 (Being amount received as Service Revenue) 24-Aug Accounts Payable $ 1,500.00 to Cash $ 1,500.00 (Being amount paid for supplies purchased on account) 01-Sep Prepaid Rent $ 4,680.00 To Cash $ 4,680.00 (Being amount paid as rent for storage shed) 21-Sep Cash $ 14,200.00 To Service Revenue $ 14,200.00 (Being amount received as Service Revenue) 17-Oct Cash $ 18,900.00 To Service Revenue $ 18,900.00 (Being amount received as Service Revenue) 01-Dec No Entry 05-Dec No Entry 08-Dec Misc Expenses $ 1,100.00 To Cash $ 1,100.00 (Being amount paid for Permit) 12-Dec Racing Supplies $ 2,100.00 To Accounts Payable $ 2,100.00 (Being amount of office supplies purchased on account) 15-Dec Cash $ 26,800.00 To Service Revenue $ 26,800.00 (Being amount of cash received from 40 teams 16-Dec Salary $ 2,400.00 To Cash $ 2,400.00 (Being amount paid for victors salary) 31-Dec Dividend $ 3,500.00 To Cash $ 3,500.00 (Being amount of dividnd paid ) 31-Dec No Enry Adjusting Entries Date Particular Amount (Dr) Amount(Cr) 31-Dec Depreciation $ 8,200.00 To Mountain Bikes & Kayaks $ 8,200.00 (Being amount of Dep) 31-Dec Insurance =(330*6) $ 1,980.00 To Prepaid Insurance $ 1,980.00 (Being amount of 6 months insurance) 31-Dec Rent=($390*4) $ 1,560.00 To Prepaid Rent $ 1,560.00 (Being amount of 4 months rent) 31-Dec Office supplies Expenses=($1500-$360) $ 1,140.00 To Office Supplies $ 1,140.00 (Being amount of Office supplies Expenses) 31-Dec Interest Expenses=($37000*6%*5/12) $ 925.00 To Interest Payable $ 925.00 (Being amount of 5 months interest on loan @6%) 31-Dec Racing Supplies Expenses=($2100-$280) $ 1,820.00 To Recing Supplies $ 1,820.00 (Being amount of racing supplies expenses) 31-Dec Income Tax Expenses $ 13,100.00 To Income Tax Payable $ 13,100.00 (Being amount of Income tax Payable) Cash A/c Balance Date Title Debit Credit Debit Credit 01-Jul $ 17,500.00 $ 17,500.00 01-Jul $ 17,500.00 $ 35,000.00 01-Jul $ 3,960.00 $ 31,040.00 02-Jul $ 1,600.00 $ 29,440.00 07-Jul $ 320.00 $ 29,120.00 08-Jul $ 18,000.00 $ 11,120.00 15-Jul $ 3,000.00 $ 14,120.00 22-Jul $ 3,400.00 $ 17,520.00 24-Jul $ 780.00 $ 16,740.00 30-Jul $ 10,400.00 $ 27,140.00 01-Aug $ 37,000.00 $ 64,140.00 04-Aug $ 18,700.00 $ 45,440.00 10-Aug $ 3,600.00 $ 49,040.00 17-Aug $ 11,800.00 $ 60,840.00 24-Aug $ 1,500.00 $ 59,340.00 01-Sep $ 2,400.00 $ 56,940.00 21-Sep $ 14,200.00 $ 71,140.00 17-Oct $ 18,900.00 $ 90,040.00 08-Dec $ 1,100.00 $ 88,940.00 15-Dec $ 26,800.00 $ 1,15,740.00 16-Dec $ 2,400.00 $ 1,13,340.00 31-Dec $ 3,500.00 $ 1,09,840.00 Common Stock Balance Date Title Debit Credit Debit Credit 01-Jul $ 17,500.00 $ 17,500.00 01-Jul $ 17,500.00 $ 35,000.00 Prepaid Insurance Date Title Debit Credit Debit Credit 01-Jul $ 3,960.00 $ 3,960.00 31-Jul $ 1,980.00 $ 1,980.00 Insurance Date Title Debit Credit Debit Credit 31-Jul $ 1,980.00 $ 1,980.00 Legal Fees Date Title Debit Credit Debit Credit 31-Jul $ 1,600.00 $ 1,600.00 Office supplies Date Title Debit Credit Debit Credit 18-Jul $ 1,500.00 $ 1,500.00 31-Dec $ 1,140.00 $ 360.00 Office supplies Expenses Date Title Debit Credit Debit Credit 31-Dec $ 1,140.00 $ 1,140.00
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