Net sales are $2,700,000, beginning total assets are $750,000, and the asset turnover is 3.0. What is the ending total asset balance?
A) $1,050,000.
B) $900,000.
C) $600,000.
D) $1,125,000.

Question

Quizplus · Accepted Answer

Asset turnover = Net sales / Average total assets3.0 = 2,700,000 / [(Beginning total assets + Ending total assets) / 2]3.0 = 2,700,000 / [(750,000 + Ending total assets) / 2]3.0 * [(750,000 + Ending total assets) / 2] = 2,700,000(750,000 + Ending total assets) / 2 = 900,000750,000 + Ending total assets = 1,800,000Ending total assets = 1,800,000 - 750,000Ending total assets = $1,050,000

Net Sales Are $2,700,000, Beginning Total Assets Are $750,000, and the Asset