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Great Adventures Problem 3-1 The articles of incorporation state that the corpor

ID: 2392598 • Letter: G

Question

Great Adventures Problem 3-1 The articles of incorporation state that the corporation will sell 35,000 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 $17,500 off common stock to Suzie Jul. 1 Sell $17.500 of common stock to Tony Jul 1 Jul 2 Pay legal fees of $1600 associated with incorporation Jul 4 P Jul. 7 Pay for Jul. 8 Purchase 10 mountain bikes, paying $18,000 cash. Jul. 15 On the day of the clinic, Great Jul. 22 B ut 24 Pay for advertising of S780 to local rad? Staton for a keyaking cine to be held on August 10 Attendees cen pay S130 in advance or $180 on the day of the dnic. Jul. 30 Great a one-year insurance policy for $3,960 ($330 per month) to cover es to perticipents e office supplies of $1,500 on account of $320 to a local newspeper for an upcoming mountain biking clinic to be will be charged $60 the day of the clinic s receives cash of $3.000 from 50 bikers Tony conducts the mountan bking clinic biking clinic, Tony holds another mounten biking cinic and the c loan for the comparny from the city council, which hes recently pessed an initiative encoureging business development related to outdoor ectivites The loan is due in three years and 6% annual interest is due each year on July 31 Aug. 4 The company Aug. 10 Twenty a Aug 17 Tony conducts a second kayak clinic, and the compeny receives $11,800 cash Aug 24 Office supplies of $1,500 purchased on July 4 are paid in full. Sep. 1 To Sep 21 Tony conducts a Oct 17 Tony conducts an orienteering clinic. Participants practice how to 14 kayaks, paying $18,700 cash pay $3,600 ($180 each), in eddition to the $10,400 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic bing clinic. The company receives $14,200 cash 811 PM 6/25/2018

Explanation / Answer

Great Adventure Inc. General Journal   Date Journal Amount (DR) Amount (CR) 01-Jul Cash $                       17,500.00     To Common Stock $                               17,500.00 (Being sell common stock to Suzie 01-Jul Cash $                       17,500.00     To Common Stock $                               17,500.00 (Being sell common stock to Tony) 01-Jul Prepaid Insurance $                         3,960.00     To Cash $                                 3,960.00 (Being amount of Insurance purchased ) 02-Jul Legal Fees $                         1,600.00      To Cash $                                 1,600.00 (Being amount of legal fees paid ) 04-Jul Office Supplies $                         1,500.00     To Accounts Payable $                                 1,500.00 (Being amount of office supplies purchased on account) 07-Jul Advertisement Expenses $                             320.00      To Cash $                                     320.00 (Being amount paid for advertisement in newspaper) 08-Jul Equipments $                       18,000.00     To Cash $                               18,000.00 (Being amount of purchased of 10 mountain bikes) 15-Jul Cash $                         3,000.00      To Service Revenue $                                 3,000.00 (Being amount received from 80 Bikers) 22-Jul Cash $                         3,400.00     To Service Revenue $                                 3,400.00 (Being amount received for service revenue 24-Jul Advertisement Expenses $                             780.00     To Cash $                                     780.00 (Being amount paid for advertisement in Radio) 30-Jul Cash $                       10,400.00    To deferred Revenue $                               10,400.00 (Being amount of advance received from 50 Kayakers for upcomin Kayak clinic) 01-Aug Cash $                       37,000.00     To Loan $                               37,000.00 (Being amount of loan taken from City Counsil) 04-Aug Equipments $                       18,700.00     To Cash $                               18,700.00 (Being amount paid for purchased of Kayaks) 10-Aug Cash $                         3,600.00     To Deferred Revenue $                                 3,600.00 (Being amount received as advance from 20 Kayaks) 17-Aug Cash $                       11,800.00     To Service Revenue $                               11,800.00 (Being amount received as Service Revenue) 24-Aug Accounts Payable $                         1,500.00     to Cash $                                 1,500.00 (Being amount paid for supplies purchased on account) 01-Sep Prepaid Rent   $                         4,680.00     To Cash $                                 4,680.00 (Being amount paid as rent for storage shed) 21-Sep Cash $                       14,200.00      To Service Revenue $                               14,200.00 (Being amount received as Service Revenue) 17-Oct Cash $                       18,900.00     To Service Revenue $                               18,900.00 (Being amount received as Service Revenue) 01-Dec No Entry 05-Dec No Entry 08-Dec Misc Expenses $                         1,100.00      To Cash $                                 1,100.00 (Being amount paid for Permit) 12-Dec Racing Supplies $                         2,100.00     To Accounts Payable $                                 2,100.00 (Being amount of office supplies purchased on account) 15-Dec Cash $                       26,800.00      To Service Revenue $                               26,800.00 (Being amount of cash received from 40 teams   16-Dec Salary $                         2,400.00     To Cash $                                 2,400.00 (Being amount paid for victors salary) 31-Dec Dividend $                         3,500.00     To Cash $                                 3,500.00 (Being amount of dividnd paid ) 31-Dec No Enry Adjusting Entries Date Particular Amount (Dr) Amount(Cr) 31-Dec Depreciation $                         8,200.00     To Mountain Bikes & Kayaks $                                 8,200.00 (Being amount of Dep) 31-Dec Insurance =(330*6) $                         1,980.00      To Prepaid Insurance   $                                 1,980.00 (Being amount of 6 months insurance) 31-Dec Rent=($390*4) $                         1,560.00     To Prepaid Rent $                                 1,560.00 (Being amount of 4 months rent) 31-Dec Office supplies Expenses=($1500-$360) $                         1,140.00      To Office Supplies $                                 1,140.00 (Being amount of Office supplies Expenses) 31-Dec Interest Expenses=($37000*6%*5/12) $                             925.00     To Interest Payable $                                     925.00 (Being amount of 5 months interest on loan @6%) 31-Dec Racing Supplies Expenses=($2100-$280) $                         1,820.00      To Recing Supplies $                                 1,820.00 (Being amount of racing supplies expenses) 31-Dec Income Tax Expenses $                       13,100.00     To Income Tax Payable $                               13,100.00 (Being amount of Income tax Payable) Cash A/c Balance Date Title Debit   Credit Debit Credit 01-Jul $                       17,500.00 $          17,500.00 01-Jul $                       17,500.00 $          35,000.00 01-Jul $                                 3,960.00 $          31,040.00 02-Jul $                                 1,600.00 $          29,440.00 07-Jul $                                     320.00 $          29,120.00 08-Jul $                               18,000.00 $          11,120.00 15-Jul $                         3,000.00 $          14,120.00 22-Jul $                         3,400.00 $          17,520.00 24-Jul $                                     780.00 $          16,740.00 30-Jul $                       10,400.00 $          27,140.00 01-Aug $                       37,000.00 $          64,140.00 04-Aug $                               18,700.00 $          45,440.00 10-Aug $                         3,600.00 $          49,040.00 17-Aug $                       11,800.00 $          60,840.00 24-Aug $                                 1,500.00 $          59,340.00 01-Sep $                                 2,400.00 $          56,940.00 21-Sep $                       14,200.00 $          71,140.00 17-Oct $                       18,900.00 $          90,040.00 08-Dec $                                 1,100.00 $          88,940.00 15-Dec $                       26,800.00 $      1,15,740.00 16-Dec $                                 2,400.00 $      1,13,340.00 31-Dec $                                 3,500.00 $      1,09,840.00 Common Stock Balance Date Title Debit   Credit Debit Credit 01-Jul $                               17,500.00 $ 17,500.00 01-Jul $                               17,500.00 $ 35,000.00 Prepaid Insurance Date Title Debit   Credit Debit Credit 01-Jul $                         3,960.00 $            3,960.00 31-Jul $                                 1,980.00 $            1,980.00 Insurance Date Title Debit   Credit Debit Credit 31-Jul $                         1,980.00 $            1,980.00 Legal Fees Date Title Debit   Credit Debit Credit 31-Jul $                         1,600.00 $            1,600.00 Office supplies Date Title Debit   Credit Debit Credit 18-Jul $                         1,500.00 $            1,500.00 31-Dec $                                 1,140.00 $                360.00 Office supplies Expenses Date Title Debit   Credit Debit Credit 31-Dec $                         1,140.00 $            1,140.00