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) $553,000 Sales revenue (MU watches) 128,000 $681,000 Total revenues Expenses: Cost of goods sold (MU watches) Operating expenses Depreciation expense Interest expense Income tax expense 75,000 304,776 55,000 30,224 60,000 Total expenses 525,000 Net Income $156,000 GREAT ADVENTURES, INC. Balance Sheets December 31, 2020 and 2019 2020 Increase (1) or Decrease (D) 2019 $ Assets Current assets: Cash Accounts receivable Inventory Other current assets Long-term assets: Land Buildings Equipment Less: Accumulated depreciation 286,046 52,500 17,750 13,750 143,000 40,000 14.500 11,500 143,046 (0) 12,500 (1) 3,250 (0) 2,250 (1) 400,000 (1) 1,200,000 (0) 400,000 1,200,000 70,000 (81,500) 0 0 70,000 (26,500) 55,000 (0) Total assets $ 1,958,546 $ 252,500 3,250 (0) $12,750 800 60,000 $9,500 800 40,500 19,500 (0) Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Pald-in capital Retained earnings Treasury stock 544,796 32,500 512,296 (1) 130,000 1,105,000 170,200 (65,000) 30,000 0 139,200 0 100,000 (0) 1,105,000 (0) 31,000 (0) (65,000) (0) Total liabilities and stockholders' equity $ 1,958,546 $ 252,500 As you can tell from the financial statements, 2020 was an especially busy year. Tony and Suzle were able to use the $1.2 million receved 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. References Section Break Great Adventures Problem 12-1 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.) Answer is complete but not entirely correct. a. b. C. d. Receivables turnover ratio Average collection period Inventory turnover ratio Average days in inventory Current ratio Acid-test ratio Debt to equity ratio Times interest earned ratio 3.00 times 23.40 days 2.00 times 6.00 days 0.60% to 1 0.10 to 1 23.00 % e. f. 9. h. 56.00 times 2. Calculate the following profitability ratios for 2020. (Round your answers to 2 decimal places.) * Answer is complete but not entirely correct. a. 41.41 % b. % Gross profit ratio (on the MU watches) Return on assets Profit margin Asset turnover Return on equity C. 14.11 22.91 0.62 % d. times e. 0.00 X %
