Reference no: EM13489763

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.