29 Jun Question The following transactions occur over the remainder of the year
Question
The following transactions occur over the remainder of the year.
Aug. 1
Suzie applies for and obtains a $30000 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 5% annual interest is due each year on July 31.
Aug. 4 The company purchases 14 kayaks, costing $21000
Aug. 10
Ten additional kayakers pay $1500 ($150 each), in addition to the $4000 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.
Aug. 24 Office supplies of $1000purchased 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 $3,480 ($290 per month).
Sep. 21 Tony conducts a rock-climbing clinic. The company receives $14,900 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. Clinic fees total $18,000.
Dec. 1
Tony decides to hold the company’s 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 $600.
Dec. 5
To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $25 in salary for each team that competes in the race. His salary will be paid after the race.
Dec. 8
The company pays $1,000 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense.
Dec. 15 Forty teams pay a total of $24000 to race. The race is held.
Dec. 16 The company pays Victor’s salary of $1000.
Dec. 31 The company pays a dividend of $2,000 ($10,000 to Tony and $10,000 to Suzie).
The following information relates to year-end adjusting entries as of December 31, 2012.
a.Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,000
b. Six months’ worth of insurance has expired.
c. Of the $10000 of office supplies purchased on July 4, $300 remains.
d. Interest expense on the $30,000 loan obtained from the city council on August 1 should be recorded.
Requiere:
1. Record transactions from August 1 through December 31.
2. Record adjusting entries as of December 31, 2012. (Do not round intermediate calculations.)
3. Post each adjusting entries as of december 31, 2012
4. Prepare an adjusted trial balance as of December 31, 2012.
5.prepare the financial statements
6. Record closing entries as of December 31, 2012.
7. Prepare a post-closing trial balance as of December 31, 2012. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Equity.)
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