GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2020

Revenues:

Service revenue (clinic, racing, TEAM)

$535,000

Sales revenue (MU watches)

110,000

Total revenues

$645,000

Expenses:

Cost of goods sold (MU watches)

66,000

Operating expenses

303,876

Depreciation expense

46,000

Interest expense

29,324

Income tax expense

54,600

Total expenses

499,800

Net income

$145,200

Assets
Current assets:
Cash	$	298,404		$	134,000	164,404	(I)
Accounts receivable		39,000			31,000	8,000	(I)
Inventory		16,400			13,600	2,800	(I)
Other current assets		12,400			10,600	1,800	(I)
Long-term assets:
Land		250,000			0	250,000	(I)
Buildings		1,200,000			0	1,200,000	(I)
Equipment		61,000			61,000
Less: Accumulated depreciation		(70,250)			(24,250)	46,000	(I)
Total assets	$	1,806,954		$	225,950
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$11,400			$8,600	2,800	(I)
Interest payable		710			710
Income tax payable		54,600			36,000	18,600	(I)
Long-term liabilities:
Notes payable		450,404			28,000	422,404	(I)
Stockholders' equity:
Common stock		130,000			30,000	100,000	(I)
Paid-in capital		1,106,000			0	1,106,000	(I)
Retained earnings		143,840			122,640	21,200	(I)
Treasury stock		(90,000)			0	(90,000)	(I)
Total liabilities and stockholders' equity	$	1,806,954		$	225,950

2. Calculate the following profitability ratios for 2020. (Round your answers to 2 decimal places.)

a.Gross profit ratio (on the MU watches)%

b.Return on assets: ____ %

c.Profit margin: ____ %

d.Asset turnover: ___ times

e.Return on equity: _____%