During 2015, Rathke Corporation reported net sales of $3,000,000, net income of $1,200,000, and depreciation expense of $100,000. Rathke also reported beginning total assets of $1,000,000, ending total assets of $1,500,000, plant assets of $800,000, and accumulated depreciation of $500,000. Rathke's asset turnover is
A)3 times.
B)2.4 times.
C)2.0 times.
D).96 times.

Question

Quizplus · Accepted Answer

Asset turnover is calculated as net sales divided by average total assets. Average total assets = ($1,000,000 + $1,500,000) / 2 = $1,250,000. Asset turnover = $3,000,000 / $1,250,000 = 2.4 times.

During 2015, Rathke Corporation Reported Net Sales of $3,000,000, Net