On July 1, 2018, Tony and Suzie organize their 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 July 31.
The articles of incorporation state that the corporation will sell 33,000 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 $16,500 of common stock to Suzie.
Jul. 1 Sell $16,500 of common stock to Tony.
Jul. 1 Purchase a one-year insurance policy for $5,880 ($490 per month) to cover injuries to participants during outdoor clinics.
Jul. 2 Pay legal fees of $1,800 associated with incorporation.
Jul. 4 Purchase office supplies of $1,400 on account.
Jul. 7 Pay for advertising of $290 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $40 the day of the clinic.
Jul. 8 Purchase 10 mountain bikes, paying $11,900 cash.
Jul. 15 On the day of the clinic, Great Adventures receives cash of $2,400 from 60 bikers. Tony conducts the mountain biking clinic.
Jul. 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $2,800.
Jul. 24 Pay for advertising of $690 to a local radio station for a kayaking clinic to be held on August 10. Attendees can pay $130 in advance or $180 on the day of the clinic.
Jul. 30 Great Adventures receives cash of $10,400 in advance from 80 kayakers for the upcoming kayak clinic.
Aug. 1 Great Adventures obtains a $41,000 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.
Aug. 4 The company purchases 14 kayaks, paying $21,000 cash.
Aug. 10 Twenty additional kayakers pay $3,600 ($180 each), in addition to the $10,400 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.
Aug. 17 Tony conducts a second kayak clinic, and the company receives $12,500 cash.
Aug. 24 Office supplies of $1,400 purchased on July 4 are paid in full.
Sep. 1 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 $3,360 ($280 per month).
Sep. 21 Tony conducts a rock-climbing clinic. The company receives $14,600 cash.
Oct. 17 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. The company receives $19,600 cash.
Dec. 1 Tony decides to hold the companyâs 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 $510.Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $60 in salary for each team that competes in the race. His salary will be paid after the race.Dec. 8 The company pays $1,600 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense.Dec. 12 The company purchases racing supplies for $2,500 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.Dec. 15 The company receives $20,400 cash from a total of forty teams, and the race is held.Dec. 16 The company pays Victorâs salary of $2,400.
Dec. 31 The company pays a dividend of $4,500 ($2,250 to Tony and $2,250 to Suzie).
Dec. 31 Using his personal money, Tony purchases a diamond ring for $5,000. Tony surprises Suzie by proposing that they get married. Suzie accepts and they get married!
The following information relates to year-end adjusting entries as of December 31, 2018.
a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,000.
b. Six monthsâ worth of insurance has expired.
c. Four monthsâ worth of rent has expired.
d. Of the $1,400 of office supplies purchased on July 4, $360 remains.
e. Interest expense on the $41,000 loan obtained from the city council on August 1 should be recorded.
f. Of the $2,500 of racing supplies purchased on December 12, $170 remains.
g. Suzie calculates that the company owes $14,700 in income taxes.
Assume the following ending balances for the month of July.
Balance Cash $ 28,040 Prepaid insurance 5,880 Supplies (Office) 1,400 Equipment (Bikes) 11,900 Accounts payable 1,400 Deferred revenue 10,400 Common stock 33,000 Service revenue (Clinic) 5,200 Advertising expense 980 Legal fees expense 1,800
3.
value:
3.00 points
Required information
Great Adventures Problem 3-1 Part 2
2. Record adjusting entries as of December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
On July 1, 2018, Tony and Suzie organize their 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 July 31.
The articles of incorporation state that the corporation will sell 33,000 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 $16,500 of common stock to Suzie.
Jul. 1 Sell $16,500 of common stock to Tony.
Jul. 1 Purchase a one-year insurance policy for $5,880 ($490 per month) to cover injuries to participants during outdoor clinics.
Jul. 2 Pay legal fees of $1,800 associated with incorporation.
Jul. 4 Purchase office supplies of $1,400 on account.
Jul. 7 Pay for advertising of $290 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $40 the day of the clinic.
Jul. 8 Purchase 10 mountain bikes, paying $11,900 cash.
Jul. 15 On the day of the clinic, Great Adventures receives cash of $2,400 from 60 bikers. Tony conducts the mountain biking clinic.
Jul. 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $2,800.
Jul. 24 Pay for advertising of $690 to a local radio station for a kayaking clinic to be held on August 10. Attendees can pay $130 in advance or $180 on the day of the clinic.
Jul. 30 Great Adventures receives cash of $10,400 in advance from 80 kayakers for the upcoming kayak clinic.
Aug. 1 Great Adventures obtains a $41,000 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.
Aug. 4 The company purchases 14 kayaks, paying $21,000 cash.
Aug. 10 Twenty additional kayakers pay $3,600 ($180 each), in addition to the $10,400 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.
Aug. 17 Tony conducts a second kayak clinic, and the company receives $12,500 cash.
Aug. 24 Office supplies of $1,400 purchased on July 4 are paid in full.
Sep. 1 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 $3,360 ($280 per month).
Sep. 21 Tony conducts a rock-climbing clinic. The company receives $14,600 cash.
Oct. 17 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. The company receives $19,600 cash.
Dec. 1 Tony decides to hold the companyâs 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 $510.Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $60 in salary for each team that competes in the race. His salary will be paid after the race.Dec. 8 The company pays $1,600 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense.Dec. 12 The company purchases racing supplies for $2,500 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.Dec. 15 The company receives $20,400 cash from a total of forty teams, and the race is held.Dec. 16 The company pays Victorâs salary of $2,400.
Dec. 31 The company pays a dividend of $4,500 ($2,250 to Tony and $2,250 to Suzie).
Dec. 31 Using his personal money, Tony purchases a diamond ring for $5,000. Tony surprises Suzie by proposing that they get married. Suzie accepts and they get married!
The following information relates to year-end adjusting entries as of December 31, 2018.
a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,000.
b. Six monthsâ worth of insurance has expired.
c. Four monthsâ worth of rent has expired.
d. Of the $1,400 of office supplies purchased on July 4, $360 remains.
e. Interest expense on the $41,000 loan obtained from the city council on August 1 should be recorded.
f. Of the $2,500 of racing supplies purchased on December 12, $170 remains.
g. Suzie calculates that the company owes $14,700 in income taxes.
Assume the following ending balances for the month of July.
| Balance | ||
| Cash | $ | 28,040 |
| Prepaid insurance | 5,880 | |
| Supplies (Office) | 1,400 | |
| Equipment (Bikes) | 11,900 | |
| Accounts payable | 1,400 | |
| Deferred revenue | 10,400 | |
| Common stock | 33,000 | |
| Service revenue (Clinic) | 5,200 | |
| Advertising expense | 980 | |
| Legal fees expense | 1,800 | |
3.
value:
3.00 points
Required information
Great Adventures Problem 3-1 Part 2
2. Record adjusting entries as of December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Related questions
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 cannotget my debits and credits to equal. Any information you can provideis appreciated.
Great Adventures Problem 3-1
[The following information applies to the questionsdisplayed below.]
| The followingtransactions occur over the remainder of the year. |
| Aug. | 1 | Great Adventures obtains a $38,000 low-interest loan for thecompany from the city council, which has recently passed aninitiative encouraging business development related to outdooractivities. The loan is due in three years, and 6% annual interestis due each year on July 31. |
| Aug. | 4 | The companypurchases 14 kayaks, costing $15,400. |
| Aug. | 10 | Twenty additional kayakers pay $3,200 ($160 each), in additionto the $6,600 that was paid in advance on July 30, on the day ofthe clinic. Tony conducts the first kayak clinic. |
| Aug. | 17 | Tony conducts asecond kayak clinic, and the company receives $11,800 cash. |
| Aug. | 24 | Office suppliesof $1,800 purchased on July 4 are paid in full. |
| Sep. | 1 | To provide better storage of mountain bikes and kayaks when notin use, the company rents a storage shed, purchasing a one-yearrental policy for $2,400 ($200 per month). |
| Sep. | 21 | Tony conducts arock-climbing clinic. The company receives $13,300 cash. |
| Oct. | 17 | Tony conducts an orienteering clinic. Participants practice howto understand a topographical map, read an altimeter, use acompass, and orient through heavily wooded areas. Clinic fees total$19,700. |
| Dec. | 1 | Tony decides to hold the companyâs first adventure race onDecember 15. Four-person teams will race from checkpoint tocheckpoint using a combination of mountain biking, kayaking,orienteering, trail running, and rock-climbing skills. The firstteam in each category to complete all checkpoints in order wins.The entry fee for each team is $650. |
| Dec. | 5 | To help organize and promote the race, Tony hires his collegeroommate, Victor. Victor will be paid $70 in salary for each teamthat competes in the race. His salary will be paid after therace. |
| Dec. | 8 | The company pays$1,800 to purchase a permit from a state park where the race willbe held. The amount is recorded as a miscellaneous expense. |
| Dec. | 12 | The company purchases racing supplies for $2,300 on account duein 30 days. Supplies include trophies for the top-finishing teamsin each category, promotional shirts, snack foods and drinks forparticipants, and field markers to prepare the racecourse. |
| Dec. | 15 | Forty teams paya total of $26,000 to race. The race is held. |
| Dec. | 16 | The company paysVictorâs salary of $2,800. |
| Dec. | 31 | The company paysa dividend of $4,100 ($2,050 to Tony and $2,050 to Suzie). |
| Dec. | 31 | Using his personal money, Tony purchases a diamond ring for$4,300. Tony surprises Suzie by proposing that they get married.Suzie accepts! |
| The followinginformation relates to year-end adjusting entries as of December31, 2015. |
| a. | Depreciation of the mountain bikes purchased on July 8 andkayaks purchased on August 4 totals $7,400. |
| b. | Six monthsâworth of insurance has expired. |
| c. | Four monthsâworth of rent has expired. |
| d. | Of the $1,800 ofoffice supplies purchased on July 4, $380 remains. |
| e. | Interest expenseon the $38,000 loan obtained from the city council on August 1should be recorded. |
| f. | Of the $2,300 ofracing supplies purchased on December 12, $100 remains. |
| g. | Suzie calculatesthat the company owes $13,500 in income taxes. |
| Assume thefollowing ending balances for the month of July. |
| Balance | ||
| Cash | $ | 19,390 |
| Prepaid insurance | 4,320 | |
| Supplies (Office) | 1,800 | |
| Equipment (Bikes) | 15,600 | |
| Accounts payable | 1,800 | |
| Unearned revenue | 6,600 | |
| Common stock | 30,000 | |
| Service revenue (Clinic) | 5,200 | |
| Advertising expense | 1,190 | |
| Legal fees expense | 1,300 | |
Great Adventures Problem 3-1 Part 4
| 4. | Prepare an adjusted trial balance as of December 31, 2015.(The items in the Trial Balance should be grouped asfollows: Assets, Liabilities, Equity, Dividends, Revenues, andExpenses.) |
5.
Great Adventures Problem 3-1 Part 5
| 5-a. | For the period July 1 to December 31, 2015, prepare an incomestatement. |
| 5-b. | For the period July 1 to December 31, 2015, prepare an statementof stockholdersâ equity. All account balances on July 1 were zero.(Amounts to be deducted should be indicated with minussign.) |
| 5-c. | Prepare a classified balance sheet as of December 31, 2015. |
6.
Great Adventures Problem 3-1 Part 6
| 6. | Record closingentries as of December 31, 2015. |
7.
Great Adventures Problem 3-1 Part 7
| 7. | Post the closing entries of retained earnings to theT-accounts. |
8.
Great Adventures Problem 3-1 Part 8
| 8. | Prepare a post-closing trial balance as of December 31, 2015.(The items in the Trial Balance should be grouped asfollows: Assets, Liabilities, Equity.) |
| The following transactions occurover the remainder of the year. |
| Aug. | 1 | Great Adventures obtains a $42,000 low-interest loan for thecompany from the city council, which has recently passed aninitiative encouraging business development related to outdooractivities. The loan is due in three years, and 6% annual interestis due each year on July 31. |
| Aug. | 4 | The company purchases 14 kayaks,costing $23,400. |
| Aug. | 10 | Twenty additional kayakers pay $3,400 ($170 each), in additionto the $8,400 that was paid in advance on July 30, on the day ofthe clinic. Tony conducts the first kayak clinic. |
| Aug. | 17 | Tony conducts a second kayakclinic, and the company receives $12,200 cash. |
| Aug. | 24 | Office supplies of $1,600purchased on July 4 are paid in full. |
| Sep. | 1 | To provide better storage of mountain bikes and kayaks when notin use, the company rents a storage shed, purchasing a one-yearrental policy for $3,240 ($270 per month). |
| Sep. | 21 | Tony conducts a rock-climbingclinic. The company receives $14,300 cash. |
| Oct. | 17 | Tony conducts an orienteering clinic. Participants practice howto understand a topographical map, read an altimeter, use acompass, and orient through heavily wooded areas. Clinic fees total$19,800. |
| Dec. | 1 | Tony decides to hold the companyâs first adventure race onDecember 15. Four-person teams will race from checkpoint tocheckpoint using a combination of mountain biking, kayaking,orienteering, trail running, and rock-climbing skills. The firstteam in each category to complete all checkpoints in order wins.The entry fee for each team is $640. |
| Dec. | 5 | To help organize and promote the race, Tony hires his collegeroommate, Victor. Victor will be paid $60 in salary for each teamthat competes in the race. His salary will be paid after therace. |
| Dec. | 8 | The company pays $1,400 topurchase a permit from a state park where the race will be held.The amount is recorded as a miscellaneous expense. |
| Dec. | 12 | The company purchases racing supplies for $2,600 on account duein 30 days. Supplies include trophies for the top-finishing teamsin each category, promotional shirts, snack foods and drinks forparticipants, and field markers to prepare the racecourse. |
| Dec. | 15 | Forty teams pay a total of$25,600 to race. The race is held. |
| Dec. | 16 | The company pays Victorâs salaryof $2,400. |
| Dec. | 31 | The company pays a dividend of$3,800 ($1,900 to Tony and $1,900 to Suzie). |
| Dec. | 31 | Using his personal money, Tony purchases a diamond ring for$4,100. Tony surprises Suzie by proposing that they get married.Suzie accepts! |
| The following informationrelates to year-end adjusting entries as of December 31, 2015. |
| a. | Depreciation of the mountain bikes purchased on July 8 andkayaks purchased on August 4 totals $8,700. |
| b. | Six monthsâ worth of insurancehas expired. |
| c. | Four monthsâ worth of rent hasexpired. |
| d. | Of the $1,600 of office suppliespurchased on July 4, $330 remains. |
| e. | Interest expense on the $42,000loan obtained from the city council on August 1 should berecorded. |
| f. | Of the $2,600 of racing suppliespurchased on December 12, $210 remains. |
| g. | Suzie calculates that thecompany owes $13,300 in income taxes. |
| Assume the following endingbalances for the month of July. |
| Balance | ||
| Cash | $ | 23,320 |
| Prepaidinsurance | 4,680 | |
| Supplies(Office) | 1,600 | |
| Equipment(Bikes) | 16,900 | |
| Accountspayable | 1,600 | |
| Unearnedrevenue | 8,400 | |
| Common stock | 32,000 | |
| Service revenue(Clinic) | 7,400 | |
| Advertisingexpense | 1,000 | |
| Legal feesexpense | 1,900 | |
| 1. Record transactions from August 1 through December 31 2. Record adjusting entries as of December 31, 2015 | ||
