Tony and Suzie graduate from college in May 2018 and begindeveloping their new business. They begin by offering clinics forbasic outdoor activities such as mountain biking or kayaking. Upondeveloping a customer base, they’ll hold their first adventureraces. These races will involve four-person teams that race fromone checkpoint to the next using a combination of kayaking,mountain biking, orienteering, and trail running. In the long run,they plan to sell outdoor gear and develop a ropes course foroutdoor enthusiasts.

On July 1, 2018, Tony and Suzie organize their new company as acorporation, Great Adventures Inc. The articles of incorporationstate that the corporation will sell 24,000 shares of common stockfor $1 each. Each share of stock represents a unit of ownership.Tony and Suzie will act as co-presidents of the company. Thefollowing transactions occur from July 1 through December 31.

  

Jul.		1		Sell $12,000 of common stock toSuzie.
Jul.		1		Sell $12,000 of common stock toTony.
Jul.		1		Purchase a one-year insurancepolicy for $4,800 ($400 per month) to cover injuries toparticipants during outdoor clinics.
Jul.		2		Pay legal fees of $1,200 associatedwith incorporation.
Jul.		4		Purchase office supplies of $1,600on account.
Jul.		7		Pay for advertising of $340 to alocal newspaper for an upcoming mountain biking clinic to be heldon July 15. Attendees will be charged $60 on the day of theclinic.
Jul.		8		Purchase 10 mountain bikes, paying$17,400 cash.
Jul.		15		On the day of the clinic, GreatAdventures receives cash of $3,000 from 50 bikers. Tony conductsthe mountain biking clinic.
Jul.		22		Because of the success of the firstmountain biking clinic, Tony holds another mountain biking clinicand the company receives $3,500.
Jul.		24		Pay for advertising of $860 to alocal radio station for a kayaking clinic to be held on August 10.Attendees can pay $140 in advance or $190 on the day of theclinic.
Jul.		30		Great Adventures receives cash of$7,000 in advance from 50 kayakers for the upcoming kayakclinic.

Aug.	1		Great Adventures obtains a $39,000low-interest loan for the company from the city council, which hasrecently passed an initiative encouraging business developmentrelated to outdoor activities. The loan is due in three years, and6% annual interest is due each year on July 31.
Aug.	4		The company purchases 14 kayaks, paying$22,400 cash.
Aug.	10		Twenty additional kayakers pay $3,800($190 each), in addition to the $7,000 that was paid in advance onJuly 30, on the day of the clinic. Tony conducts the first kayakclinic.
Aug.	17		Tony conducts a second kayak clinic, andthe company receives $11,700 cash.
Aug.	24		Office supplies of $1,600 purchased onJuly 4 are paid in full.
Sep.	1		To provide better storage of mountainbikes and kayaks when not in use, the company rents a storage shed,purchasing a one-year rental policy for $3,000 ($250 permonth).
Sep.	21		Tony conducts a rock-climbing clinic. Thecompany receives $14,800 cash.
Oct.	17		Tony conducts an orienteering clinic.Participants practice how to understand a topographical map, readan altimeter, use a compass, and orient through heavily woodedareas. The company receives $18,900 cash.
Dec.	1		Tony decides to hold the company’s firstadventure race on December 15. Four-person teams will race fromcheckpoint 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 inorder wins. The entry fee for each team is $520.
Dec.	5		To help organize and promote the race,Tony hires his college roommate, Victor. Victor will be paid $50 insalary for each team that competes in the race. His salary will bepaid after the race.
Dec.	8		The company pays $1,000 to purchase apermit from a state park where the race will be held. The amount isrecorded as a miscellaneous expense.
Dec.	12		The company purchases racing supplies for$2,100 on account due in 30 days. Supplies include trophies for thetop-finishing teams in each category, promotional shirts, snackfoods and drinks for participants, and field markers to prepare theracecourse.
Dec.	15		The company receives $20,800 cash from atotal of forty teams, and the race is held.
Dec.	16		The company pays Victor’s salary of$2,000.
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 adiamond ring for $5,000. Tony surprises Suzie by proposing thatthey get married. Suzie accepts and they get married!

    

The following information relates to year-end adjusting entriesas of December 31, 2018.

A -Depreciation of the mountain bikes purchased on July 8 andkayaks purchased on August 4 totals $7,960.

B- Six months’ worth of insurance has expired.

C- Four months’ worth of rent has expired.

D- Of the $1,600 of office supplies purchased on July 4, $370remains.

E- Interest expense on the $39,000 loan obtained from the citycouncil on August 1 should be recorded.

F- Of the $2,100 of racing supplies purchased on December 12,$210 remains.

G- Suzie calculates that the company owes $14,500 in incometaxes.

Requirements:

	Record each of thetransactions listed above in the 'General Journal' tab (these areshown as items 1 - 27). Review the 'General Ledger' and the 'TrialBalance' tabs to see the effect of the transactions on the accountbalances.
2.	Record the adjustingentries in the 'General Journal' tab (these are shown as items28-34).
3.	Review the adjusted'Trial Balance' as of December 31, 2018.
4.	Prepare an incomestatement for the period ended December 31, 2018, in the 'IncomeStatement' tab.
5.	Prepare a classifiedbalance sheet as of December 31, 2018 in the 'Balance Sheet'tab.
6.	Record the closingentries in the 'General Journal' tab