The tolnowing intormation appiwes to the questions oispiayeo below.j On July 1,

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The tolnowing intormation appiwes to the questions oispiayeo below.j On July 1, 2013, Tony and Suzie organize thelr new company as a corporation, Great Adventures Inc. The following transactions occur from August 1 through December 31. Also, the balances are provided for the month ended Juty 31. The articles of Incorporation state that the corporation will sell 22,000 shares of common stock for $1 each. Each share of stock represents a unit of ownershlp. Tony and Suzie will act as co-presidents of the company. The following business activities occur during Juty for Great Adventures. Jul 1 Sell $11,000 of common stock to Suzie Jul 1Sell $11,000 of common stock to Tony Jul 1 Purchase a one-year Insurance pollcy for $4,560 (5300 per month) to cover Injuries to particlpants during outdoor clinics Jul 2 Pay legal fees of $1,400 assoclated witn Incorporation. Jul 4 Purchase omice supples or $1,900 on account Jul 7 Pay Tor advertislng of $400 to a local newspaper for an upcoming mountaln biklng clinic to be held on July 15. Attendees will be charged $60 the day of the cllnlc. Jul 3 Purchase 10 mountain blkes, paying $16.200 cash. Jul 15 On the day of the clinic Great Adventures recelves cash of $4,200 from 70 bikers. Tony conducts the mountain biking clinic. Jul 22 Because of the success of the first mountain blking cllnic, Tony holds another mountaln blking clinic and the company recelves $4,600. Jul 24 Pay for advertising of $950 to a local radlo station for a kayaking clinic to be held on August 10. Attendees can pay $120 In advance or $170 on the day of the clinic Jul 30 Great Adventures recelves cash of $3,400 In advance from 70 kayakers for the upcoming kayak cllnic. Aug. 1Great Adventures obtains a $4B,000 low-interestloan for the company from the city council, which has recently passed an Inltlative encouraging business development related to outooor activities. 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, paylng $16,500 cash. Aug. 10 Twenty additional kayakers pay $3.40?($170 each). In addition to the $8.400 that was paid in advance on July 30, on the day or the clinic. Tony conducts the first kayak clinic. Aug- 17 Tony conducts a second kayak cilnlc, and the company recelves $12,500 cash. Aug. 24 0mce supplles of $1,900 purchased on July 4 are pald In full. Sep. 1 To provide better storage of mountaln blkes and kayaks when not in use, the company rents a storage shed, purchasing a one-year rental polcy for $2,760 ($230 per montn). Sep. 21 Tony conducts a rock-climbing Clinic. The company recelves $15,100 cash. Oct 17 Tony conducts an orlenteering clinic. Particlpants practice how to understand a topographical map, read an atimeter, use a compass, and orient through heavlly wooded areas. The company recelves s19,500 cash. Dec. 1 Tony decides to hold the company's first adventure race on December 15. Four-person teams will race from checkpolnt to checkpolnt using a combination of mountaln blking, kayaklng. orienteering, trall running. and rock- cimbing skllls. The first team In each category to complete all checkpoints In order wins. The entry fee for each team 15 $640 Dec. 5 To help organlze and promote the race, Tony hlres his college roommate, Victor. Victor will be pald $60 In salary for each team that competes in the race. His salary wll be pald after the race.Dec. 3 The company pays $1,900 to purchase a permit from a state park where the race ill be held. The amount is recorded as a miscellaneous expense Dec. 12 The company purchases racing supplies for $2,300 on account due In 30 days. Supplles Include trophles for the top-1nishing teams In each category, promotional shirts, snack Toods and drinks for partic pants, and eld markers to prepare the racecourse Dec. 15 The company recelves $25,600 cash from a total or forty teams, and the race Is held.Dec 16 The company pays Victor's salary of $2400. Dec. 31 The company pays a dlvidend of $4,500 ($2,250 to Tony and $2.250 to Suzie). Dec 31 Uslng his personal money. Tony purchases a dlamond ring for $4,100. Tony surprises Suzie by proposing that tney get married. Suzie accepts and they get married! The following Infarmatlon relates to year-end adjusting entries as of December 31, 2018. a. Depreclation of the mountaln blkes purchased on July a and kayaks purchased on August 4 totals $7,600. b. Sx months worth of Insurance has explred. C. Four months worth of rent has explired. d. Of the $1900 of omice supplies purchased on Juty 4, $290 remalns e. Interest expense on the $4B,000 loan obtained from the city councll on August 1 should be recorded. t.ofthe $2,300 or racing supplles purchased on December 12, $200 remains. g. Suzie calculates that the company owes $14,700 In Income taxes Assume the following ending balances for the montn of July Cash Prepald Insurance Suppliles (Oice) Equipment (Bikes) Accounts payable Deferred revenue Common stock Service revenue (Clinic) Advertsing expense Legal fees expense Balance S 15,690 4.560 1-900 6.200 1-900 B400 22.000 3000 1,350 1400

Explanation / Answer

In the books of Great Adventures Inc. :

Contd.

Adjusting Entries:

Great Adventures Inc.

Adjusted Trial Balance

December 31, 2017

Great Adventures Inc.

Income Statement

For the period ended December 31, 2017

Date General Journal Debit Credit $ $ July 1 Cash 22,000 Common Stock 22,000 July 1 Prepaid Insurance 4,560 Cash 4,560 July 2 Legal Fees Expense 1,400 Cash 1,400 July 4 Office Supplies 1,900 Accounts Payable 1,900 July 7 Advertising Expense 400 Cash 400 July 8 Equipment ( Bikes) 16,200 Cash 16,200 July 15 Cash 4,200 Service Revenue ( Clinic) 4,200 July 22 Cash 4,600 Service REvenue ( Clinic) 4,600 July 24 Advertising Expense 950 Cash 950 July 30 Cash 8,400 Deferred Revenue 8,400

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