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. GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2020 Revenues: Service revenue (clinic, racing, TEAM) Sales revenue (MU watches) $555,000 130,000 Total revenues Expenses Cost of goods sold (MU watches) Operating expenses Depreciation expense Interest expense Income tax expense 76,000 304,876 56,000 30,324 60,600 Total expenses 527,800 Net income $157,200 GREAT ADVENTURES, INC. Balance Sheets December 31, 2020 and 2019 Increase (1) or Decrease (D) 2020 2019 Assets Current assets: 313,784 144,000 1,000 14,600 11,600 169,784 () 13,000 () 3,300 () 2,300 () Cash Accounts receivable 54,000 17,900 13,900 Other current assets Long-term assets: Land Buildings Equipment Less: Accumulated depreciation 600,000 1,000,000 71,000 (82,750) 0 600,000 () 1,000,000 (I) 71,000 (26,750) 56,000 () Total assets $ 1,987,834 $255,450 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable $12,900 810 60,600 $9,600 810 41,000 3,300 () 19,600 () 522,284 () Long-term liabilities: Notes payable 555,284 33,000 Stockholders' equity: Common stock Paid-in capital Retained earnings Treasury stock 120,000 1,105,000 193,240 (60,000) 20,000 0 151,040 0 00,000 () 1,105,000 (I) 42,200 () (60,000) () Total liabilities and stockholders' equity s 1,987,834 255,450 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 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 2 decimal places.) a. Receivables turnover ratio b. Average collection period c. Inventory turnover ratio d. Average days in inventory e. Current ratio f. Acid-test ratio g. Debt to equity ratio h. Times interest earned ratio 14.42 times 25.31 days 4.68 times 77.99 days 5.38 to1 5.14 to 1 46.35 % 8.18 times Great Adventures Problem 12-1 Part 2 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 e. Return on equity 88.91 | % 14.02% 22.95 % 14.02 times 11.57
