Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

How do I calculate asset turnover ratio? During January 2024 , the following transactions occurred: January1January4January8January15Receivedcashonaccountsreceivable,$22,500January19Paidcashforsalaries,$30,300.January28PaidcashforJanuaryutilities,$17,000.January30FireworksalesforJanuarytotaled$225,000.Allofthesesaleswereonaccount.Thecostoftheunitssoldwas$117,500.Purchasedequipmentfor$20,000.Thecompanyestimatesaresidualvalueof$2,000andafour-yearservicelife.Paidcashonaccountspayable,$10,000.Purchasedadditionalinventoryonaccount,$87,900. The following information is available on January 31, 2024.

image text in transcribedimage text in transcribedHow do I calculate asset turnover ratio?

During January 2024 , the following transactions occurred: January1January4January8January15Receivedcashonaccountsreceivable,$22,500January19Paidcashforsalaries,$30,300.January28PaidcashforJanuaryutilities,$17,000.January30FireworksalesforJanuarytotaled$225,000.Allofthesesaleswereonaccount.Thecostoftheunitssoldwas$117,500.Purchasedequipmentfor$20,000.Thecompanyestimatesaresidualvalueof$2,000andafour-yearservicelife.Paidcashonaccountspayable,$10,000.Purchasedadditionalinventoryonaccount,$87,900. The following information is available on January 31, 2024. a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company records an adjusting entry for $3,550 for estimated future uncollectible accounts. c. The company has accrued interest on notes receivable for January. Interest will be received each December 31. d. Unpaid salaries owed to employees at the end of January are $33,100. e. The company accrued income taxes at the end of January of $9,500. (c) Calculate the asset turnover ratio for the month of January. If the industry average asset turnover is 0.5 times per month, is the company more or less efficient at producing revenues with its assets than other companies in the same industry

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Using Financial Accounting Information The Alternative to Debits and Credits

Authors: Gary A. Porter, Curtis L. Norton

7th Edition

978-0-538-4527, 0-538-45274-9, 978-1133161646

More Books

Students also viewed these Accounting questions

Question

Choosing Your Topic Researching the Topic

Answered: 1 week ago

Question

The Power of Public Speaking Clarifying the

Answered: 1 week ago