Question

At the beginning of the year, Carson Company reported total current assets of $658,000 and total assets of $2,450,000. Carson reported sales of $6,000,000 for the year. At the end of the year, Carson reported total current assets of $790,000 and total assets of $2,800,000. Compute the total asset turnover.
a. 2.45
b. 2.29
c. 8.29
d. 2.14

Answer 1

Answer:

Total Asset Turnover: 2.2857

Explanation:

                           Total Assets    

       

Begininng Balance           2,450,000        

       

Ending Balance              2,800,000          

       

Period activity                      350,000    

       

Sales: 6,000,000      

       

Total Asset Turnover:                   Sales  

                                              Average Total Assets

                 6,000,000              

( 2,450,000 + 2,800,000 )  / 2

=

6,000,000

2,625,000

=

2.2857