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
Ans e – Current Ratio – Current Assets / Current Liabilities
Current Assets = Cash + Accounts Receivable + Inventory + Others = 325094 + 46500 + 17150 + 13150 = $401894
Current Liabilities = Accounts Payable + Interest Payable + Income Tax Payable = 12150 + 760 + 57600 = $70510
Current Ratio = 401894 / 70510 = 5.69 / 1
Ans f – Acid-Test Ratio = Quick Assets (Assets which can be converted into cash easily) / Current Liabilities
Quick Assets = Current Assets – Inventory = 401894 – 17150 = $384744
Acid-Test Ratio = 384744 / 70510 = 5.45 / 1
Ans g – Debt to Equity Ratio = Total Debt / Total Equity
Total Debt = Long Term Borrowings / Liabilities = Notes Payable = $502844
Total Equity = Common Stock + Paid In Capital + Retained Earnings – Treasury Stock = $1318040
Debt to Equity Ratio = 502844 / 1318040 = 0.3815 = 38.15%