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
| 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 | ||
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.) |
