Help needed with Great Adventures Problem 3-1 Part 4, 5, 6, 7, and 8. I have wor
ID: 2418455 • Letter: H
Question
Help needed with Great Adventures Problem 3-1 Part 4, 5, 6, 7, and 8.
I have worked on preparing the adjusted trial balance but cannot get my debits and credits to equal. Any information you can provide is appreciated.
Great Adventures Problem 3-1
[The following information applies to the questions displayed below.]
Great Adventures obtains a $38,000 low-interest loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31.
Twenty additional kayakers pay $3,200 ($160 each), in addition to the $6,600 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.
To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed, purchasing a one-year rental policy for $2,400 ($200 per month).
Tony conducts an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily wooded areas. Clinic fees total $19,700.
Tony decides to hold the company’s first adventure race on December 15. Four-person teams will race from checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, 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 $650.
To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $70 in salary for each team that competes in the race. His salary will be paid after the race.
The company purchases racing supplies for $2,300 on account due in 30 days. Supplies include trophies for the top-finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse.
Using his personal money, Tony purchases a diamond ring for $4,300. Tony surprises Suzie by proposing that they get married. Suzie accepts!
Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,400.
Great Adventures Problem 3-1 Part 4
Prepare an adjusted trial balance as of December 31, 2015. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Equity, Dividends, Revenues, and Expenses.)
5.
Great Adventures Problem 3-1 Part 5
For the period July 1 to December 31, 2015, prepare an income statement.
For the period July 1 to December 31, 2015, prepare an statement of stockholders’ equity. All account balances on July 1 were zero. (Amounts to be deducted should be indicated with minus sign.)
Prepare a classified balance sheet as of December 31, 2015.
6.
Great Adventures Problem 3-1 Part 6
7.
Great Adventures Problem 3-1 Part 7
Post the closing entries of retained earnings to the T-accounts.
8.
Great Adventures Problem 3-1 Part 8
Prepare a post-closing trial balance as of December 31, 2015. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Equity.)
The following transactions occur over the remainder of the year.
Explanation / Answer
Analysis of the transactions with the accounting equation is given below for reference:
(4) Adjusted Trial Balance and (8) Post Closing Trial Balance Trial Balance Transactions Unadjusted Adjustments Adjusted Income Post Closing 31st July 1st Aug to 31st Dec TB-31 Dec 31st Dec Trial Balance Statement Trial Balance ASSETS Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash 19390 112300 28300 103390 103390 103390 Prepaid Insurance 4320 4320 2160 2160 2160 Supplies (Office) 1800 1800 1420 380 380 Supplies (Racing) 2300 2300 2200 100 100 Prepaid Rent 2400 2400 800 1600 1600 Equipment (Bikes) 15600 15600 15600 15600 Equipment (Kayaks) 15400 15400 15400 15400 Accumulation depn 7400 7400 7400 LIABILITIES Loan 38300 38300 38300 38300 Accounts payable 1800 500 2300 2300 2300 Unearned Revenue 6600 6600 6600 0 Income Tax Payable 13500 13500 13500 Interest accrued 950 950 950 EQUITY Common Stock 30000 30000 30000 30000 Retained earnings 46180 DIVIDEND 4100 4100 4100 REVENUES Service Revenue(clinic) 5200 74000 79200 6600 85800 85800 EXPENSES Advertising expenses 1190 1190 1190 1190 Legal fees expense 1300 1300 1300 1300 Insurance Expense 2160 2160 2160 Rent expense 800 800 800 Office supplies expnese 1420 1420 1420 Racing Supplies expense 2200 2200 2200 Interest Expense 950 950 950 Income Tax expense 13500 13500 13500 Depreciation expense 7400 7400 7400 Salary Expense 2800 2800 2800 2800 Misc Exp 1800 1800 1800 1800 43600 43600 141100 141100 156400 156400 35030 35030 178250 178250 35520 85800 138630 138630 Net Income 50280 85800 85800 138630 138630 5-a) INCOME STATEMENT Revenue (Clinic) 85800 Expenses: Advertising expenses 1190 Legal fees expense 1300 Insurance Expense 2160 Rent expense 800 Office supplies expense 1420 Racing Supplies expense 2200 Salary Expense 2800 Depreciation expense 7400 Misc Exp 1800 21070 Operating Income 64730 Less: Other Expense: Interest Expense 950 Income Tax expense 13500 14450 Net Income 50280 5-b) STATEMENT OF STOCKHOLDERS EQUITY (July 1 to Dec 31) Common Retained Stock Earnings Opening balance 0 0 Add: Stock issued 30000 Add Net Income 50280 30000 50280 Less :Dividend 0 4100 Closing balance 30000 46180 5-c) BALANCE SHEET: ASSETS Current Assets: Cash 103390 Prepaid Insurance 2160 Supplies (Office) 380 Supplies (Racing) 100 Prepaid Rent 1600 107630 Fixed Assets: Equipment (Bikes) 15600 Equipment (kayaks) 15400 31000 Less: Accumulated Depn 7400 23600 131230 LIABILITIES: Current Liabilities: Accounts payable 2300 Unearned Revenue 0 Income Tax Payable 13500 Interest accrued 950 16750 Long Term Liabilities: Loan 38300 38300 Total liabilities 55050 Equity: Common Stock 30000 Retained Earnings 46180 76180 Total liabilities & Equity 131230 6) ADJUSTMENT ENTRIES: Debit Credit 1) Depreciation Expense 7400 Accumulated Depreciation (Bikes & Kayaks) 7400 (depreciation for the period 1st july to 31st december) 2) Office Supplies Expense 1420 Supplies(Office) 1420 (office supplies used) 3) Racing Supplies expense 2200 Supplies(Racing) (racing supplies used) 4) Interest Expense 950 Interest Accrued 950 (interest for 5 months provided) 5) Rent Expense 800 Rent Prepaid 800 (rent adjusted for 4 months) 6) Insurance Expense 2160 Preaid Insurance 2160 (half year's insurance expensed) 7) Unearned Revenue 6600 Service Revenue (clinic) 6600 8) Income Tax Expense 13500 Income tax Payable 13500 (tax expense for the half year) CLOSING ENTRIES: Income Summary 35520 Advertising expenses 1190 Legal fees expense 1300 Insurance Expense 2160 Rent expense 800 Office supplies expense 1420 Racing Supplies expense 2200 Salary Expense 2800 Depreciation expense 7400 Misc Exp 1800 Interest Expense 950 Income Tax expense 13500 (expenses closed to income summary) Revenue (clinic) 85800 Income summary 85800 (revenue closed to income summary) Income summary 50280 Retained earnings 50280 (Net income closed to retained earnings) Retained Earnings 4100 Dividend 4100 (dividend closed to retained earnings)Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.