Question

Calculate Net Sales to Total Assets Ratio, show work

All Is Not Paradise in Eden's Garden: Part 1 $689,247 $395,683 $293,564 Joe and Kaitlin Eden, co-owners of Eden's Garden, a small nurs- ery, lawn, and garden supply business, have just received their Balance Sheet, Eden's Garden Assets Current Assets Cash $6,457 Accounts Receivable $29,152 Less Allowance for $3,200 $25,952 Doubtful Accounts Inventory $88,157 Supplies $7,514 Prepaid Expenses $1,856 Total Current Assets $129,936 Fixed Assets Land $59,150 Buildings $51,027 Less Accumulated Depreciation $2,061 548,966 Autos $24,671 Less Accumulated $12,300 $12,371 Depreciation Equipment $22,375 Less Accumulated Depreciation $1,250 $21,125 Furniture and Fixtures $10,295 Less Accumulated Depreciation $1,000 59,295 Total Fixed Assets $150,907 Intangibles (Goodwill) Total Assets $280,843 Liabilities Current Liabilities Accounts Payable $54,258 Notes Payable $20,150 Credit Line Payable $8,118 Accrued Wages/Salaries Payable $1,344 Accrued Interest Payable $1,785 Accrued Taxes Payable $1,967 Total Current Liabilities $87,622 Long-Term Liabilities Mortgage $72,846 Note Payable $47,000 Total Long-Term Liabilities $119,846 Owner's Equity Sam Lloyd, Capital $73,375 Total Liabilities and Owner's Equity $280,843 Income Statement, Eden's Garden Net Sales Revenue* Cost of Goods Sold Beginning Inventory 1/1/XX $78,271 + Purchases $403,569 Goods available for Sale $481,840 - Ending Inventory 12,31/xx $86,157 Cost of Goods Sold Gross Profit Operating Expenses Advertising $22,150 Insurance $9,187 Depreciation Building $26,705 Autos $7,895 Equipment $11,200 Salaries $116,541 Uniforms $4,018 Repairs and Maintenance $9,097 Travel $2,658 Entertainment $2,798 Total Operating Expenses General Expenses Utilities $7.987 Telephone $2,753 Professional Fees $3,000 Postage $1,892 Payroll Taxes $11,589 Total General Expenses Other Expenses Interest Expense $21,978 Bad check Expense 5679 Miscellaneous expense $1,248 Total Other Expenses Total Expenses Net Income Credit sales represented $289,484 of this total. $212,249 SO $27,221 $23,905 $263,375 $30.189 year-end financial statements from their accountant. At their last meeting with their accountant, Shelley Edison, three months ago the Eders had mentioned that they seemed to be having trouble paying their bills on time. Some of our suppliers have threatened to put us on credit hold," said Ice

Answer 1

Net sales to total assets ratio is computed by using the below formula:

= Net sales revenue / total assets

= $ 689,247 / $ 280,843

= 2.45 Approximately

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