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)	$531,000
Sales revenue (MU watches)	106,000
Total revenues		$637,000
Expenses:
Cost of goods sold (MU watches)	64,000
Operating expenses	303,676
Depreciation expense	44,000
Interest expense	29,124
Income tax expense	53,400
Total expenses		494,200
Net income		$142,800

GREAT ADVENTURES, INC. Balance Sheets December 31, 2020 and 2019
		2020			2019	Increase (I) or Decrease (D)
Assets
Current assets:
Cash	$	315,928		$	132,000	183,928	(I)
Accounts receivable		36,000			29,000	7,000	(I)
Inventory		16,100			13,400	2,700	(I)
Other current assets		12,100			10,400	1,700	(I)
Long-term assets:
Land		300,000			0	300,000	(I)
Buildings		1,100,000			0	1,100,000	(I)
Equipment		59,000			59,000
Less: Accumulated depreciation		(67,750)			(23,750)	44,000	(I)
Total assets	$	1,771,378		$	220,050
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$11,100			$8,400	2,700	(I)
Interest payable		690			690
Income tax payable		53,400			35,000	18,400	(I)
Long-term liabilities:
Notes payable		429,428			27,000	402,428	(I)
Stockholders' equity:
Common stock		125,000			25,000	100,000	(I)
Paid-in capital		1,106,000			0	1,106,000	(I)
Retained earnings		147,760			123,960	23,800	(I)
Treasury stock		(102,000)			0	(102,000)	(I)
Total liabilities and stockholders' equity	$	1,771,378		$	220,050

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.

References

Section BreakGreat Adventures Problem 12-1

2.

value: 2.00 points

Required information

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.)

References

WorksheetGreat Adventures Problem 12-1 Part 1Difficulty: 3 Hard

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3.

value: 1.00 points

Required information

Great Adventures Problem 12-1 Part 2

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

References

WorksheetGreat Adventures Problem 12-1 Part 2Difficulty: 3 Hard