Great Adventures Problem 3-1

[The following information applies to the questionsdisplayed below.]
  
On July 1, 2018, Tony and Suzie organize their new company as acorporation, Great Adventures Inc. The following transactions occurfrom August 1 through December 31. Also, the balances are providedfor the month ended July 31.
  
The articles of incorporation state that the corporation will sell24,000 shares of common stock for $1 each. Each share of stockrepresents a unit of ownership. Tony and Suzie will act asco-presidents of the company. The following business activitiesoccur during July for Great Adventures.
  
Jul. 1 Sell $12,000 of common stock to Suzie.
Jul. 1 Sell $12,000 of common stock to Tony.
Jul. 1 Purchase a one-year insurance policy for $5,160 ($430 permonth) to cover injuries to participants during outdoorclinics.
Jul. 2 Pay legal fees of $1,800 associated withincorporation.
Jul. 4 Purchase office supplies of $1,400 on the account.
Jul. 7 Pay for advertising of $240 to a local newspaper for anupcoming mountain biking clinic to be held on July 15. Attendeeswill be charged $60 the day of the clinic.
Jul. 8 Purchase 10 mountain bikes, paying $16,900 cash.
Jul. 15 On the day of the clinic, Great Adventures receives cash of$3,000 from 50 bikers. Tony conducts the mountain bikingclinic.
Jul. 22 Because of the success of the first mountain biking clinic,Tony holds another mountain biking clinic and the company receives$3,600.
Jul. 24 Pay for advertising of $680 to a local radio station for akayaking clinic to be held on August 10. Attendees can pay $110 inadvance or $160 on the day of the clinic.
Jul. 30 Great Adventures receives cash of $7,700 in advance from 70kayakers for the upcoming kayak clinic.
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, paying $14,000 cash.
Aug. 10 Twenty additional kayakers pay $3,200 ($160 each), inaddition to the $7,700 that was paid in advance on July 30, on theday of the clinic. Tony conducts the first kayak clinic.
Aug. 17 Tony conducts a second kayak clinic, and the companyreceives $12,000 cash.
Aug. 24 Office supplies of $1,400 purchased on July 4 are paid infull.
Sep. 1 To provide better storage of mountain bikes and kayaks whennot in use, the company rents a storage shed, purchasing a one-yearrental policy for $3,240 ($270 per month).
Sep. 21 Tony conducts a rock-climbing clinic. The company receives$14,500 cash.
Oct. 17 Tony conducts an orienteering clinic. Participants practicehow to understand a topographical map, read an altimeter, use acompass, and orient through heavily wooded areas. The companyreceives $18,100 cash.
Dec. 1 Tony decides to hold the company’s 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 andpromote the race, Tony hires his college roommate, Victor. Victorwill be paid $30 in salary for each team that competes in the race.His salary will be paid after the race. Dec. 8 The company pays$1,500 to purchase a permit from a state park where the race willbe held. The amount is recorded as a miscellaneous expense. Dec. 12The company purchases racing supplies for $2,600 on account due in30 days. Supplies include trophies for the top-finishing teams ineach category, promotional shirts, snack foods and drinks forparticipants, and field markers to prepare the racecourse. Dec. 15The company receives $25,600 cash from a total of forty teams, andthe race is held. Dec. 16 The company pays Victor’s salary of$1,200.
Dec. 31 The company pays a 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$5,400. Tony surprises Suzie by proposing that they get married.Suzie accepts and they get married!

The following information relates to year-end adjusting entries asof December 31, 2018.
  
a. Depreciation of the mountain bikes purchased on July 8 andkayaks purchased on August 4 totals $8,600.
b. Six months’ worth of insurance has expired.
c. Four months’ worth of rent has expired.
d. Of the $1,400 of office supplies purchased on July 4, $330remains.
e. Interest expense on the $42,000 loan obtained from the citycouncil on August 1 should be recorded.
f. Of the $2,600 of racing supplies purchased on December 12, $170remains.
g. Suzie calculates that the company owes $13,700 in incometaxes.
  
Assume the following ending balances for the month of July.

	Balance
Cash	$	13,520
Prepaidinsurance		5,160
Supplies(Office)		1,400
Equipment(Bikes)		16,900
Accountspayable		1,400
Deferredrevenue		7,700
Common stock		24,000
Service revenue(Clinic)		6,600
Advertisingexpense		920
Legal feesexpense		1,800
3. Post transactions from August 1 throughDecember 31 and adjusting entries on December 31 to T-accounts.(Be sure to include beginning balances in theT-accounts.) 4. Prepare an adjusted trial balance as ofDecember 31, 2018. (The items in the Trial Balance shouldbe grouped as follows: Assets, Contra-asset accounts, Liabilities,Equity, Dividends, Revenues, and Expenses.) 5-a. For the period July 1 to December 31,2018, prepare an income statement.    5-b. For the period July 1 to December 31,2018, prepare a statement of stockholders’ equity. All accountbalances on July 1 were zero. 5-c. Prepare a classified balance sheet as ofDecember 31, 2018. (Amounts to be deducted should beindicated with minus sign.) 6. Record closing entries as of December 31,2018. (If no entry is required for a transaction/event,select "No journal entry required" in the first accountfield.) 7. Post the closing entries of retained earningsto the T-account. 8. Prepare a post-closing trial balance as ofDecember 31, 2018.