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Record transactions from August 1 through December 31.

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(We will start the journal entries in class and you will need to post the transactions to T accounts and develop an income statement, statement of stockholder's equity, and balance sheet to be handed in. This exercise can be hand written or completed on excel - whichever you find most helpful.);Assume the following ending balances for the month of July.;Balance;Cash $ 9,000;Prepaid insurance 4,800;Supplies (Office) 1,800;Equipment (Bikes) 12,000;Accounts payable 1,800;Unearned revenue 4,000;Common stock 20,000;Service revenue (Clinic) 4,300;Advertising expense 1,000;Legal fees expense 1,500;[The following information applies to the questions displayed below.];The following transactions occur over the remainder of the year.;Aug. 1 Suzie applies for and obtains a $30,000 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 6% annual interest is due each year on July 31.;Aug. 4 The company purchases 14 kayaks, costing $28,000.;Aug. 10 Twenty additional kayakers pay $3,000 ($150 each), in addition to the $4,000 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.;Aug. 17 Tony conducts a second kayak clinic and receives $10,500 cash.;Aug. 24 Office supplies of $1,800 purchased 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 $2,400 ($200 per month).;Sep. 21 Tony conducts a rock-climbing clinic. The company receives $13,200 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 $17,900.;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 $500.;Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $50 in salary for each team that competes in the race. His salary will be paid after the race.;Dec. 8 The company pays $1,200 to purchase 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 $2,800 on account due in 30 days. Supplies include trophies for the top-finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse.;Dec. 15 Forty teams pay a total of $20,000 to race. The race is held.;Dec. 16 The company pays Victor?s salary of $2,000.;Dec. 31 The company pays a dividend of $4,000 ($2,000 to Tony and $2,000 to Suzie).;Dec. 31 Using his personal money, Tony purchases a diamond ring for $4,500. Tony surprises Suzie by proposing that they get married. Suzie accepts!;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 $8,000.;b. Six months? worth of insurance has expired.;c. Four months? worth of rent has expired.;d. Of the $1,800 of office supplies purchased on July 4, $300 remains.;e. Interest expense on the $30,000 loan obtained from the city council on August 1 should be recorded.;f. Of the $2,800 of racing supplies purchased on December 12, $200 remains.;g. Suzie calculates that the company owes $14,000 in income taxes.;Required;1. Record transactions from August 1 through December 31. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly.;2. Record adjusting entries as of December 31, 2012.;3. Post transactions from August 1 through December 31 and adjusting entries on December 31 to T-accounts;4. For the period July 1 to December 31, 2012, prepare an income statement.;5. For the period July 1 to December 31, 2012, prepare a statement of stockholders? equity. All account balances on July 1 were zero.;6. Prepare a classified balance sheet as of December 31, 2012.

 

Paper#23882 | Written in 18-Jul-2015

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