Income statement and balance sheet data for Great Adventures, Inc., are provided below. ...
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Accounting
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)
$549,000
Sales revenue (MU watches)
124,000
Total revenues
$673,000
Expenses:
Cost of goods sold (MU watches)
73,000
Operating expenses
304,576
Depreciation expense
53,000
Interest expense
30,024
Income tax expense
58,800
Total expenses
519,400
Net income
$153,600
GREAT ADVENTURES, INC. Balance Sheets December 31, 2020 and 2019
2020
2019
Increase (I) or Decrease (D)
Assets
Current assets:
Cash
$
295,570
$
141,000
154,570
(I)
Accounts receivable
49,500
38,000
11,500
(I)
Inventory
17,450
14,300
3,150
(I)
Other current assets
13,450
11,300
2,150
(I)
Long-term assets:
Land
550,000
0
550,000
(I)
Buildings
1,000,000
0
1,000,000
(I)
Equipment
68,000
68,000
Less: Accumulated depreciation
(79,000)
(26,000)
53,000
(I)
Total assets
$
1,914,970
$
246,600
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$12,450
$9,300
3,150
(I)
Interest payable
780
780
Income tax payable
58,800
39,500
19,300
(I)
Long-term liabilities:
Notes payable
523,820
31,500
492,320
(I)
Stockholders' equity:
Common stock
120,000
20,000
100,000
(I)
Paid-in capital
1,105,000
0
1,105,000
(I)
Retained earnings
184,120
145,520
38,600
(I)
Treasury stock
(90,000)
0
(90,000)
(I)
Total liabilities and stockholders' equity
$
1,914,970
$
246,600
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.
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.)
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