Great Adventures Problem 3-1 The following information applies to the questions

Question

Great Adventures Problem 3-1 The following information applies to the questions displayed below On July 1, 2018, Tony and Suzie organize as a their new company as a corporation, Great Adventures Inc. The following transactions occur from ation state that the corporation will sell 31,000 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 ectivities occur during July for Great Adventures Jul. 1 Sell $15,500 of common stock to Suzie. Jul. 1 Sell $15,500 of common stock to Tony Jul. 1 Jul. 2 Pay legal fees of $1,500 Jul. 4 Purchase office supplies of $1,600 on account Jul. 7 Pay for advertising of $270 to a local newspaper for an upcoming a one-year insurance policy for $4,320 ($360 per month) to cover injuries to particlpants during outdoor clinics nountain biking clinic to be heid on July 15. Attendees will be charged $50 the day of the clinic mountain bikes, paying $11,100 cash Jul. 8 Jul. 15 On the day of the clinic, Great Adventures Jul. 22 Jul 24 Pay for receives cash of $2.500 from 50 bikers. Tony conducts the mountain biking clinic. of the biking clinic, Tony holds another mountain biking clinic and the company receives $3,050 of $810 to a local radio station for a kayaking clinic to be held on August 10 receives cash of $5,500 in es can pay $110 in advance or $160 on the day of the clinic from 50 kayakers for the upcoming kayak cinic loan for the company from the city council, which has recently Jul. 30 Great obtains a $38,000 low-interest passed an initiative encouraging business development related to outdoo ctves. The loan is due in three years, and 6% annual interest is due each year on July 31. Aug. 4 The company purchases 14 kayaks, paying $14,400 cash 10 Twenty addional kayakers pay $3,200 $160 each), in edition to the $5,500 that was paid in advance on July 30, on the day of the cinic. Tony conducts the first kaynk clinic. Aug. 17 Tony conducts a second kayak clinic, and the company receives $11,600 cash on July 4 are paid in full bikes and kayaks when not in use, the company rents a storage shed, purchasing a one-year rental policy for $4,320($360 per month) Sep. 1 To provide better storage of Sep. 21 Tony Oct. 17 Tomy company receives $19,200 cash. Dec. 1 Tony decides to hoid the company's first adventure race on December 15. Four-person teams ill race from checkpoint to checkpoint using a combination of mountain biking, kayaking. a rock-climbing clinic. The company $14,400 cash dinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily wooded areas. The trail running, and rock-climbing skills. The first team in each category to complete all checkpoints in order wins. The entry fee for each team is $520.Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be peid $60 in salary for each team that competes in the race. His salary will be paid after the pays $1,900 to purchase a permit from a state park where the race will be held. The amount is recorded as a on account due in 30 days. Supplies i race Dec. 8 The expense.Dec. 12 The company racing supplies for $2,100 trophies for the top-finishing teams in each category, promotional shirts, snack foods and drinks for participents, and field markers to prepare the Dec. 15 The company $20,800 cash from a total of forty teams, and the race is held.Dec. 16 The company pays Victor's salary of $2,400. Dec. 31 The company pays a dividend of $4,400 ($2,200 to Tony and $2,200 to Suzie) Dec 31 Using his personal money, Tony a diamond ring for $3,500. Tony surprises Suzie by proposing that they get married. Suzie accepts and they get married

Explanation / Answer

Journal Date General Journal Debit Credit 1 Jul-01 Cash A/c 15500 To Common Stock A/c 15500 2 Jul-01 Cash A/c 15500 To Common Stock A/c 15500 3 Jul-01 Prepaid Insurance A/c 4320 To Cash A/c 4320 4 02-Jul Legal Fees Expense A/c 1500 To Cash A/c 1500 5 04-Jul Office Supplies A/c 1600 To Accounts Payable A/c 1600 6 07-Jul Advertisement A/c 270 To Cash A/c 270 7 08-Jul Mountain bikes A/c 11100 To Cash A/c 11100 8 15-Jul Cash A/c 2500 To Sales Revenue A/c 2500 9 22-Jul Cash A/c 3050 To Sales Revenue A/c 3050 10 24-Jul Advertisement A/c 810 To Cash A/c 810 11 30-Jul Cash A/c 5500 To Unearned Revenue A/c 5500 12 01-Aug Cash A/c 38000 To Loan A/c 38000 13 04-Aug Kayak A/c 14400 To Cash A/c 14400 14 10-Aug Cash A/c 3200 Unearned Revenue A/c 5000 To Sales Revenue A/c 8200 15 17-Aug Cash A/c 11600 To Sales Revenue A/c 11600 16 24-Aug Accounts Payable A/c 1600 To Cash A/c 1600 17 01-Sep Prepaid Rent A/c 4320 To Cash A/c 4320 18 21-Sep Cash A/c 14400 To Sales Revenue A/c 14400 19 17-Oct Cash A/c 19200 To Sales Revenue A/c 19200 01-Dec No Entry 05-Dec No Entry 20 08-Dec Miscellaneous Expense A/c 1900 To Cash A/c 1900 21 12-Dec Racing Supplies A/c 2100 To Accounts Payable A/c 2100 22 15-Dec Cash A/c 20800 To Sales Revenue A/c 20800 23 16-Dec Salary Expense A/c 2400 To Cash A/c 2400 24 31-Dec Dividend A/c 4400 To Cash A/c 4400 31-Dec No entry for ring purchased Adjusting Entries a 31-Dec Depreciation A/c 9000 To Accumulated Depreciation A/c 9000 b 31-Dec Insurance Expense A/c (4320/12*6) 2160 To Prepaid Insurance A/c 2160 c 31-Dec Rent Expense A/c (4320/12*4) 1440 To Prepaid Rent A/c 1440 d 31-Dec Office Supplies Expense A/c (1600-210 1390 To Office Supplies A/c 1390 e 31-Dec Interest Expense A/c (38000*6%/12*5) 950 To Interest Payable on Loan A/c 950 f 31-Dec Racing Supplies Expense A/c (2100-100) 2000 To Racing Supplies A/c 2000 g 31-Dec Income Tax Expense A/c 14000 To Income Taxes Payable A/c 14000 Closing Entries 1 31-Dec Sales Revenue A/c 80250 To Income Summary A/c 80250 2 31-Dec Income Summary A/c 37820 Legal Fees Expense A/c 1500 Advertisement A/c 1080 Depreciation A/c 9000 Miscellaneous Expense A/c 1900 Salary Expense A/ 2400 Insurance Expense A/c 2160 Rent Expense A/c 1440 Racing Supplies Expense A/c 2000 Office Supplies Expense A/c 1390 Interest Expense A/c 950 Income Tax Expense A/c 14000 3 31-Dec Retained Earnings A/c 4400 To Dividend A/c 4400 Great Adventurers Inc Adjusted Trial Balance December 31,2018 Debit Credit Cash 102230 Stock 31000 Prepaid Insurance 2160 Legal Fees Expense 1500 Office Supplies 210 Accounts Payable 2100 Advertisement 1080 Equipment 25500 Sales Revenue 80250 Unearned Revenue 0 Loan 38000 Depreciation 9000 Prepaid Rent 2880 Miscellaneous Expense 1900 Racing Supplies 100 Salary Expense 2400 Dividend 4400 Accumualated Depreciation 9000 Insurance Expense 2160 Rent Expense 1440 Office Supplies Expense 1390 Interest Expense 950 Interest on Loan Payable 950 Racing Supplies Expense 2000 Income Tax Expense 14000 Income Taxes Payable 14000 175300 175300 Great Adventurers Inc Income statement December 31,2018 Revenues Sales revenue 80250 Total Revenues 80250 Expenses Legal Fees Expense 1500 Advertisement 1080 Depreciation 9000 Miscellaneous Expense 1900 Salary Expense 2400 Insurance Expense 2160 Rent Expense 1440 Racing Supplies Expense 2000 Office Supplies Expense 1390 Interest Expense 950 Income Tax Expense 14000 Total Expense 37820 Net Income 42430 Great Adventurers Inc Statement of Stockholders's Equity For the period endedDecember 31,2018 Common Stock Retained Earnings Total Shareholders' Equity Opening Balance as on Jul 1 0 0 0 Common Stock issued 31000 0 31000 Net Income 0 42430 42430 Dividend paid 0 -4400 -4400 Closing balance ason Dec 31 31000 38030 69030 Great Adventurers Inc Balance sheet December 31,2018 Assets Liabilities Cash 102230 Accounts Payable 2100 OffiCe Supplies 210 Interest on Loan Payable 950 Racing Supplies 100 Income Taxes Payable 14000 Prepaid Insurance 2160 Total Current Liabilities 17050 Prepaid Rent 2880 Loan 38000 Total Current Assets 107580 Stockholders' Equity Equipment 25500 Common Stock 31000 Less: Accumulated Depreciation 9000 Retained Earnings 38030 Net Equipment 16500 Total Stockholders's Equity 69030 Total Assets 124080 124080

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