The following transactions occur over the remainder of the year.     Aug. 1    Suzie applies for and obtains a $40,000 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 $18,700. Aug. 10    Twenty additional kayakers pay $3,600 ($180 each), in addition to the $9,100 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 $12,300 cash. Aug. 24    Office supplies of $1,300 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 $3,360 ($280 per month). Sep. 21    Tony conducts a rock-climbing clinic. The company receives $13,400 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 $19,300. 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 $570. Dec. 5    To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $70 in salary for each team that competes in the race. His salary will be paid after the race. Dec. 8    The company pays $2,000 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 $2,300 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 $22,800 to race. The race is held. Dec. 16    The company pays Victor’s salary of $2,800. Dec. 31    The company pays a dividend of $4,500 ($2,250 to Tony and $2,250 to Suzie). Dec. 31    Using his personal money, Tony purchases a diamond ring for $4,300. 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 $8,400. b. Six months’ worth of insurance has expired. c. Four months’ worth of rent has expired. d. Of the $1,300 of office supplies purchased on July 4, $250 remains. e. Interest expense on the $40,000 loan obtained from.

1. The following transactions occur over the remainder of the year.
Aug.
1
Suzie applies for and obtains a $40,000 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 $18,700.
Aug.
10
Twenty additional kayakers pay $3,600 ($180 each), in addition
to the $9,100 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 $12,300 cash.
Aug.
24
Office supplies of $1,300 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 $3,360 ($280 per month).
Sep.
21
Tony conducts a rock-climbing clinic. The company receives
$13,400 cash.
Oct.
17
Tony conducts an orienteering clinic. Participants practice how

2. to understand a topographical map, read an altimeter, use a
compass, and orient through heavily wooded areas. Clinic fees
total $19,300.
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 $570.
Dec.
5
To help organize and promote the race, Tony hires his college
roommate, Victor. Victor will be paid $70 in salary for each
team that competes in the race. His salary will be paid after the
race.
Dec.
8
The company pays $2,000 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 $2,300 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 $22,800 to race. The race is held.
Dec.
16
The company pays Victor’s salary of $2,800.
Dec.

3. 31
The company pays a dividend of $4,500 ($2,250 to Tony and
$2,250 to Suzie).
Dec.
31
Using his personal money, Tony purchases a diamond ring for
$4,300. 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 $8,400.
b.
Six months’ worth of insurance has expired.
c.
Four months’ worth of rent has expired.
d.
Of the $1,300 of office supplies purchased on July 4, $250
remains.
e.
Interest expense on the $40,000 loan obtained from the city
council on August 1 should be recorded.
f.
Of the $2,300 of racing supplies purchased on December 12,
$180 remains.
g.
Suzie calculates that the company owes $14,500 in income
taxes.
Assume the following ending balances for the month of July.
Balance

4. Cash
$
24,330
Prepaid insurance
3,600
Supplies (Office)
1,300
Equipment (Bikes)
14,300
Accounts payable
1,300
Unearned revenue
9,100
Common stock
28,000
Service revenue (Clinic)
7,450
Advertising expense
1,020
Legal fees expense
1,300
1.
Record transactions from August 1 through December 31.
1-16 journal entries
Suzie applies for and obtains a $40,000 low-interest loan for the

5. company.
Suzie applies for and obtains a $40,000 low-interest loan for the
company.
The company purchases 14 kayaks, costing $18,700.
Twenty additional kayakers pay $3,600 ($180 each), in addition
to the $9,100 that was paid in advance on July 30, on the day of
the clinic. Tony conducts the first kayak clinic.
Tony conducts a second kayak clinic and receives $12,300 cash.
Office supplies of $1,300 purchased on July 4 are paid in full.
Purchased a one-year rental policy for $3,360 ($280 per month).
Tony conducts a rock-climbing clinic. The company receives
$13,400 cash.
Tony conducts an orienteering clinic. Clinic fees total $19,300.
...... plus next 8
2.
Record adjusting entries as of December 31, 2012.
1-7 journal entries
Depreciation of the mountain bikes purchased on July 8 and
kayaks purchased on August 4 totals $8,400.
Six months’ worth of insurance has expired.
Four months’ worth of rent has expired.
Of the $1,300 of office supplies purchased on July 4, $250
remains.
Interest expense on the $40,000 loan obtained from the city
council on August 1 should be recorded.
Of the $2,300 of racing supplies purchased on December 12,
$180 remains.
Suzie calculates that the company owes $14,500 in income
taxes.
3. Post transactions from August 1 through December 31 and
adjusting entries on December 31 to T-accounts.
cash
prepaid ins
prepaid rent

6. office supplies
racing supplies
bike equipment
kayak equiptment
accumpulated depreation
accounts payable
unearned revenue
interest payable
income tax payable
notes payable
common stock
dividends
service revenue clinics
service revenue racing
advertising expense
legal fees
miscellaneous
salaries expense
depreciation expense
insurance expense
rent
office supplies expense
racing supplies expense
interest expense
income tax expense
4.
Prepare an adjusted trial balance as of December 31, 2012.
(The items in the Trial Balance should be grouped as follows:
Assets, Liabilities, Equity, Dividends, Revenues, and
Expenses.)
accounts
debits credits

7. 5-a.
For the period July 1 to December 31, 2012, prepare an income
statement.
revenue
expenses
total expense
5-b.
For the period July 1 to December 31, 2012, prepare an
statement of stockholders’ equity. All account balances on July
1 were zero.
(Amounts to be deducted should be indicated with minus sign.)
balance at / investment by owner commonstock retained
earnings stockholder equity
5-c.
Prepare a classified balance sheet as of December 31, 2012.
6. Record closing entries as of December 31, 2012.
1-3
Record closing entries as of December 31, 2012.
Record the closing of revenue accounts.
Record the closing of expense accounts.
Record the closing of dividends account.
7.
Post the closing entries of retained earnings to the T-accounts.
beg bal
dec 31 37110
end bal

8. 8.
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.)
1)
Aug 10, 2012
Cash
3,600
Service revenue (Clinic)
3,600

9. Unearned revenue
9,100
Service revenue (Clinic)
9,100
2)
Good’
3)
Good
4)
Good
5b)
5-b.
For the period July 1 to December 31, 2012, prepare an
statement of stockholders’ equity. All account balances on July
1 were zero.
(Amounts to be deducted should be indicated with minus sign.)
COMMON STOCK
RETAINED EARNINGS
STOCKHOLDER EQUITY
BALANCE ???
0
???

10. ADD NET INCOME
LESS DIVIDENDS
5C)
accumulated depreciation
8,400
6)
Good
7)
Post the closing entries of retained earnings to the T-accounts.
Beg Bal
xxxxxxxxxxxxxxx
Dec 31
37110

11. End bal
xxxxxxxxxxxxxxx
8)
Good