# 1 tony decides to hold the companys first adventure

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com Dec. 1 Tony decides to hold the company's first adventure race on De Lon of mountain biking, kayaking, orienteering, trail runningand 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 The company receives \$20,000 cash from a total 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 \$4,000 (\$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 and they get married! The following information relates to year-end adjusting entries as of December 31, 2021. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals \$8,000. b. Six months' of the one-year insurance policy purchased on July 1 has expired. c. Four months of the one-year rental agreement purchased on September 1 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.

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