Income statement and balance sheet data for Great Adventures, Inc., are provided
ID: 2533026 • Letter: I
Question
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.
1.
2.
GREAT ADVENTURES, INC.Income Statement
For the Year Ended December 31, 2020 Revenues: Service revenue (clinic, racing, TEAM) $541,000 Sales revenue (MU watches) 116,000 Total revenues $657,000 Expenses: Cost of goods sold (MU watches) 69,000 Operating expenses 304,176 Depreciation expense 49,000 Interest expense 29,624 Income tax expense 56,400 Total expenses 508,200 Net income $148,800 Great Adventures Problem 12-1 Part1 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. Receivables turnover ratio Average collection 16.95times 21.53days .49 times 81.29days 4.66to1 23to1 0.42 X% 9.58 times riod C. Inventory turnover ratio Average days in d. nven Current ratio Acid-test ratio Debt to equity ratio Times interest earned ratio 9 h.
Explanation / Answer
1g Debt Equity ratio: Liability /Stock holders Fund Liability Accounts payable 11,850.00 Interest payable 740.00 Income tax payable 56,400.00 Notes payable 481,868.00 Total Liability 550,858.00 Stock holders Fund Common Stock 130,000.00 Paid-in capital 1,105,500.00 Retained earnings 152,460.00 Total Stock holders Fund 1,387,960.00 Debt Equity ratio: 0.40 1h Times Interest earned EBIT/Interest Total Revenue 657000 Cost of goods sold (MU watches) 69000 Operating expenses 304176 Depreciation expense 49000 EBIT 234824 Interest 29624 Times Interest earned 7.93 2a Sales revenue (MU watches) 116,000.00 Cost of goods sold (MU watches) 69,000.00 Gross profit 47,000.00 Gross Profit ratio 40.52% 2b Return on Assets Net Income/Average Total Assets Average Total Assets (1861818+234800)/2 Average Total Assets 1,048,309.00 Net Income 148,800.00 Return on Assets 14.19% 2d Assets Turnover Turnover/Average Total Assets Total Revenue 657,000.00 Average Total Assets 1,048,309.00 Assets Turnover 0.63 2e Return on Equity Net Income/Share Holders Equity Net Income 148,800.00 Share Holders Equity 1,387,960.00 Return on Equity 10.72%