Background

Adrenaline Junkies Rafting (AJR) is a local provider of white-water rafting trips. AJR has been in business for five years and is a sole proprietorship. The owner, Bill Flip, has asked you to take on the responsibility of maintaining the business books.

Project Instructions

  1. Open T accounts for all of the accounts on the May 31, 20xx trial balance.
  2. Post the June transactions and adjusting entries to the T accounts.
  3. Prepare an adjusted trial balance after you have posted all of the transactions.
  4. Prepare an income statement and balance sheet for the month ended June 30, 20xx.

Submission Instructions

Submit the adjusted trial balance, income statement and balance sheet you have prepared on either MS Excel or MS Word or similar program (i.e. Open Office, Lotus 1-2-3, etc.) Submit your file through Moodle at the appropriate link.

You may include your T accounts but this is not required. Please make sure that your adjusted trial balance and balance sheet are in balance. Also, make sure that all statements and work papers contain appropriate titles.

 

Adrenaline Junkies Rafting (AJR)
Transaction Log
June 20xx

Date                                                                                          Description

1-Jun Bill Flip contributes an additional $5,000 to the business.
1-Jun Customers book a float on the Deschutes and pay for services, $350.
3-Jun Customers book a 2-day float on the North Umpqua and pay for services, $1,100.
4-Jun AJR buys lunch supplies spending $105
6-Jun AJR buys a new 14 ft. 3 in. whitewater raft for $3,100 plus $75 shipping, due and payable to the retailer by August 1, 20xx.
6-Jun AJR spends $275 for vehicle maintenance.
7-Jun Customers book a float on the McKenzie and pay $95.
9-Jun AJR receives payment of $350, the remaining balance from a trip taken in May.
10-Jun AJR pays $325 to guides (assume they are employees but ignore payroll taxes.)
10-Jun AJR spends $75 to re-wire a trailer with damaged lights.
11-Jun AJR takes customers for a float for a payment of $325 on the McKenzie and the trip was booked by a travel agent who will be paid a 10% commission on the 5th of the following month.
12-Jun AJR takes a 50-person group for a float on the McKenzie and is paid $2,500 but has to rent two extra boats at $75 each.
12-Jun AJR purchases box lunches for the 50-person group at $5 per customer and lunches for six guides, also at $5 each.
14-Jun AJR had new brochures printed and paid $195.
15-Jun Bill Flip draws $250 from the business for his personal use.
15-Jun AJR pays the transportation fuel bill for the first half of the month of $295.
15-Jun One of the guides fails to plug in trailer wires and they are destroyed driving back to the yard. The cost to repair the damage is $75.
17-Jun AJR sends one boat and one guide to the Deschutes to haul gear for a fishing guide and will pay her $300 next month.
18-Jun Customers pay $625 for a McKenzie trip.
19-Jun Customers pay $1,250 for a 2-day North Umpqua trip.
19-Jun AJR pays $165 for food for the 2-day North Umpqua trip.
19-Jun In an effort to save money, some of the guides overload a trailer and break an axle. AJR pays $215 to repair the axle.
19-Jun AJR buys logo shirts for the guides at a cost of $250. This is discourage them from wearing inappropriate shirts and tops.
22-Jun Customers pay AJR $235 for a half-day McKenzie float.
25-Jun AJR pays $625 to guides (assume they are employees but ignore payroll taxes.)
30-Jun A nonprofit group goes on a McKenzie float but, for budgetary reasons, will pay AJR $435 by the 15th of July.
30-Jun AJR pays the transportation fuel bill for the second half of the month of $310.
30-Jun Bill Flip draws $325 from the business for his personal use.

 

Adrenaline Junkies Rafting (AJR)
Adjusting Entries
June 20xx

30-Jun AJR has an arrangement with a local shutle driver to move vehicles while boats are in the river. The charge is $25 per vehicle moved and is due by the 10th of the following month. A count of the shuttles show 11 shuttles for June (i.e. 11 vehicles moved.)
30-Jun Monthly depreciation amounts are:
16 ft. CataRaft – $75
15 ft. 6 in. Raft – $85
Trailer – $25
Van – $125
30-Jun The new 14 ft. 3 in. raft has an estimated salvage of $775 and a 48-month useful life.
30-Jun AJR owes a 3% special use permit fee to the U.S. Forest Service for all revenue generated on the North Umpqua and Deschutes.

 

Adrenaline Junkies Rafting (AJR)
Trial Balance
May 31, 20xx

Debit                      Credit

 

Cash $         4,100
Accounts Receivable $            620
16 ft. CataRaft $         2,700
Accumulated Depreciation – 16 ft. CataRaft $       1,200
15 ft. 6 in. Raft $         4,080
Accumulated Depreciation – 15 ft. 6 in. Raft $       2,040
Trailer $         1,000
Accumulated Depreciation – Trailer $          325
Van $         7,500
Accumulated Depreciation – Van $       3,500
Accounts Payable $          405
U.S. Forest Service Payable $          530
Shuttles Payable $           –
Commissions Payable $           –
Owner’s Equity – Bill Flip $     12,000
Owner’s Drawing – Bill Flip
McKenzie River Revenue
Deschutes River Revenue
North Umpqua River Revenue
River Lunch Expense
River Trip Expense
Office Supplies Expense
Maintenance & Repairs Expense
Guide Pay Expense
Rental Expense
Commissions Expense
Marketing Expense
Fuel Expense
Legal & Professional Expense

 

 

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