RWP121 (Algo) Great Adventures Continuing Case

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

GREAT ADVENTURES, INCORPORATED
Income Statement
For the Year Ended December 31, 2025
Net sales revenues		$ 172,510
Interest revenue		200
Expenses:
Cost of goods sold	$ 38,900
Operating expenses	56,280
Depreciation expense	17,650
Interest expense	7,782
Income tax expense	14,900
Total expenses		135,512
Net income		$ 37,198

GREAT ADVENTURES, INCORPORATED
Balance Sheets
December 31, 2025 and 2024
	2025	2024
Assets
Current assets:
Cash	$ 214,752	$ 64,580
Accounts receivable	48,320	0
Inventory	7,800	0
Other current assets	980	4,820
Long-term assets:
Land	580,000	0
Buildings	820,000	0
Equipment	70,240	44,000
Accumulated depreciation	(26,050)	(8,200)
Total assets	$ 1,716,042	$ 105,200
Liabilities and Stockholders Equity
Current liabilities:
Accounts payable	$ 21,600	$ 2,960
Interest payable	950	790
Income tax payable	14,900	14,080
Other current liabilities	23,400	0
Notes payable (current)	56,096	0
Notes payable (long-term)	549,608	30,800
Stockholders equity:
Common stock	128,000	22,720
Paid-in capital	976,800	0
Retained earnings	58,688	33,850
Treasury stock	(114,000)	0
Total liabilities and stockholders equity	$ 1,716,042	$ 105,200

As you can tell from the financial statements, 2025 was an especially busy year. Tony and Suzie were able to use the money received from borrowing and the issuance of stock to buy land and begin construction of cabins, dining facilities, ropes course, and the outdoor swimming pool. They even put in a baby pool to celebrate the birth of their first child.

RWP121 (Algo) Great Adventures Continuing Case Part 1

Required:

1. Calculate the following risk ratios for 2025. (Use 365 days in a year. Round your intermediate calculations and final answers to 1 decimal place.)

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