USA: +1 (725) 712-1730 
Sign in
下午7:02 ezto.mheducation.com AT&T令 Income statement and balance sheet data for Great Adventures, Inc., a provided below. GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2017 Service revenue (clinic, racing. TEAM) Sales revenue (MU watches) $545.000 $665,000 Total revenues Cost of goods sold (MU watches) Operating expenses Depreciation expense Interest expense Income tax expense 1,000 304,376 51,000 29,824 57,600 Total expenses 513,800 Net income $151.200 GREAT ADVENTURES, INC. Balance Sheet December 31, 2017 and 2016 Increase (1) or Decrease (D) 2017 2016 Current assets: $139,000 $325,094 46,500 7150 13,150 186.0940) 10,500) 3,050 2,050 Cash Accounts receivable 36,000 10 Other current assets Long-term assets: 400,000 1,100,000 66,000 76,500) Land 0 400,000 ) 0 1100,000 66,000 (25,500) 51,000 Total assets 1,891,394 $ 240,700 Liabilities and Stockholders’ Equity Current liabilities $9100 $12,150 760 57,600 3,050 Accounts payable Interest payable Income tax payable 760 19100 38.500 30,500 472,344 ) 25,000 100,000) 136,840 31,200 Notes payable 502,844 Stockholders’ equity: Common stock Paid-in capital Retained earnings Treasury stock 125,000 1105,000 168,040 0 1105,000 ) 0 (80,000) )
Expert Answer
Answer to Requirement 1.
Answer to Part a.
Receivable Turnover Ratio = Net Sales / Average Accounts Receivable
Average Accounts Receivable = (46,500 + 36,000) / 2
Average Accounts Receivable = $41,250
Receivable Turnover Ratio = 665,000 / 41,250
Receivable Turnover Ratio = 16.12 times
Answer to Part b.
Average Collection Period = 365 / Receivable Turnover Ratio
Average Collection Period = 365 / 16.12
Average Collection Period = 22.64 days or 23 days
Answer to Part c.
Inventory Turnover Ratio = Cost of goods sold / Average Inventory
Average Inventory = (17,150 + 14,100) / 2
Average Inventory = $15,625
Inventory Turnover Ratio = 71,000 / 15,625
Inventory Turnover Ratio = 4.54 times
Answer to Part d.
Average days in Inventory = 365 / Inventory Turnover Ratio
Average days in Inventory = 365 / 4.54
Average days in Inventory = 80.40 or 80 days
Answer to Part e.
Current Ratio = Current Assets / Current Liabilities
Current Assets = 325,094 + 46,500 + 17,150 + 13,150 = $401,894
Current Liabilities = 12,150 + 760 + 57,600= $70,510
Current Ratio = 401,894 / 70,510
Current Ratio =5.70 to 1
Answer to Requirement 2.
Part 1.
Gross Profit Ratio = Gross Profit / Sales * 100
Gross Profit = Sales- COGS
Gross Profit = 120,000 – 71,000 = $49,000
Gross Profit Ratio = 49,000 / 120,000 * 100
Gross Profit Ratio = 40.83%
Part 2.
Return on Assets = Net Income / Average Assets
Average Assets = (1,891,394 + 240,700) / 2
Average Assets = $1,066,047
Return on Assets = 151,200 / 1,066,047
Return on Assets = 14.18%
Part 3.
Profit Margin = Net Income / Sales * 100
Profit Margin = 151,200 / 665,000 * 100
Profit Margin = 22.74%
Part 4.
Asset Turnover Ratio = Sales / Average Assets
Average Assets = (1,891,394 + 240,700) / 2
Average Assets = $1,066,047
Asset Turnover Ratio = 665,000/ 1,066,047
Asset Turnover Ratio = 0.62 times
