Great Adventures Problem 12-1

[The following information applies to the questions displayed below.]

Income statement and balance sheet data for Great Adventures, Inc., are provided below.

As you can tell from the financial statements, 2020 was an especially busy year. Tony and Suzie were able to use the $1.2 million received from the issuance of 100,000 shares of stock to hire a construction company for $1 million to build the cabins, dining facilities, ropes course, and the outdoor swimming pool. They even put in a baby pool to celebrate the birth of their firstborn son, little Venture Matheson. Assume all sales and services are on credit.

GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2020 Revenues: $543,000 Service revenue (clinic, racing, TEAM) Sales revenue (MU watches) 118,000 $661,000 Total revenues Expenses: Cost of goods sold (MU watches) Operating expenses Depreciation expense Interest expense 70,000 304,276 50,000 29,724 Income tax expense 57,000 Total expenses 511,000 $150,000 Net income GREAT ADVENTURES, INC. Balance Sheets December 31, 2020 and 2019 Increase (I) or 2020 Decrease (D) 2019 Assets Current assets: $ 138,000 Cash 322,362 45,000 184,362 () 10,000 (I) 3,000 (I 2,000 ( Accounts receivable 35,000 14,000 17,000 Inventory Other current assets 13,000 11,000 Long-term assets: 500,000 ( 1,000,000 () 500,000 Land 1,000,000 Buildings Equipment Less: Accumulated depreciation 65,000 (75,250) 65,000 (25,250) 50,000 ( $ $ Total assets 1,887,112 237,750 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: $12,000 $9,000 3,000 (I 750 750 19,000 (I 57,000 38,000 462,362 (I) 492,362 30,000 100,000 () 1,105,000 () 35,000 () (75,000) (I) 20,000 Common stock 120,000 Paid-in capital Retained earnings Treasury stock 1,105,000 175,000 0 140,000 (75,000) $ 1,887,112 237,750 Total liabilities and stockholders' equity 1. value: 5.00 points Great Adventures Problem 12-1 Part 2 2. Calculate the following profitability ratios for 2020. (Round your answers to 1 decimal place.) Gross profit ratio (on the MU watches) % a % Return on assets Profit margin % C d Asset turnover times Return on equity % 2. value: 5.00 points Great Adventures Problem 12-1 Part 1 Required 1. Calculate the following risk ratios for 2020. (Use 365 days in a year. Round your intermediate calculations and final answers to 1 decimal place.) times Receivables turnover ratio a. b Average collection period days Inventory turnover ratio times C. Average days in inventory days Current ratio to. f Acid-test ratio o 1 Debt to equity ratio % Times interest earned ratio h. times