Question

I 1 Rustin Freeman ACCT 2101 Principles of Accounting TTH 11:00-12:15 Homework: Chapter 10 Homework HW Score: 28. 6 of 7 (2 complete) Score: 0 of 1 pt Que E10-27 (similar to) Jumble Book Photo reported the following figures on its December 31, 2018, income statement and balance sheet EEB (Click the icon to view the figures.) Compute the asset turnover ratio for 2018. Round to two decimal places. Asset turnover ratio Data Table Net sales 450,000 Dec. 31, 2017 Dec. 31, 2018 Cash $ 38,000 $ 24,000 Accounts Receivable 60,000 65,000 Merchandise Imventory 78,000 75,000 Prepaid Expenses 16,000 10,000 Property, plant, and equipment, net 190,000 17,000 Print Done Choose from any list or enter any numb All parts showing Clear All Check Answer

Answer 1

Answer:

Total Assets 2017 = Cash + Accounts Receivable + Merchandise Inventory + Prepaid Expenses + Property, Plant and Equipment, net
Total Assets 2017 = $24,000 + $60,000 + $75,000 + $16,000 + $17,000
Total Assets 2017 = $192,000

Total Assets 2018 = Cash + Accounts Receivable + Merchandise Inventory + Prepaid Expenses + Property, Plant and Equipment, net
Total Assets 2018 = $38,000 + $65,000 + $78,000 + $10,000 + $190,000
Total Assets 2018 = $381,000

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
Average Total Assets = ($192,000 + $381,000) / 2
Average Total Assets = $286,500

Asset Turnover Ratio = Net Sales / Average Total Assets
Asset turnover Ratio = $450,000 / $286,500
Asset Turnover Ratio = 1.57 times