On January 1, 2021, the general ledger of Parts Unlimited included the following account balances:

Accounts Title	Debit			Credit
Cash	$	162,400
Accounts Receivable		12,400
Inventory		37,800
Land		340,000
Equipment		347,500
Accumulated depreciation				$	172,000
Accounts Payable					14,800
Common stock					520,000
Retained Earnings					193,300
Totals	$	900,100		$	900,100

From January 1 to December 31, the following summary transactions occurred:

1. Purchased inventory on account, $325,800.
2. Sold inventory on account, $567,200. The inventory cost $342,600.
3. Received cash from customers on account, $558,700.
4. Paid cash on account, $328,500.
5. Paid cash for salaries, $94,700, and for utilities, $52,700.

In addition, Parts Unlimited had the following transactions during the year:

April		1		Purchased equipment for $95,000 using a note payable, due in 12 months plus 8% interest. The company also paid cash of $3,200 for freight and $3,800 for installation and testing of the equipment. The equipment has an estimated residual value of $10,000 and a ten-year service life.
June		30		Purchased a patent for $40,000 from a third-party marketing company related to the packaging of the companys products. The patent has a 20-year useful life, after which it is expected to have no value.
October		1		Sold equipment for $30,200. The equipment cost $60,700 and had accumulated depreciation of $37,400 at the beginning of the year. Additional depreciation for 2021 up to the point of the sale is $8,500. (Hint: Total accumulated depreciation equals the amount at the beginning of the year plus the amount recorded for the current year.)
November		15		Several older pieces of equipment were improved by replacing major components at a cost of $54,100. These improvements are expected to enhance the equipments operating capabilities. [Record this transaction using Alternative 2capitalization of new cost.]

Year-end adjusting entries:

1. Depreciation on the equipment purchased on April 1, 2021, calculated using the straight-line method.
2. Depreciation on the remaining equipment, $21,500.
3. Amortization of the patent purchased on June 30, 2021, using the straight-line method.
4. Accrued interest payable on the note payable.
5. Equipment with an original cost of $65,400 had the following related information at the end of the year: accumulated depreciation of $40,300, expected cash flows of $15,700, and a fair value of $10,800.
6. Accrued income taxes at the end of the year are $12,600.

Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Using the information from the requirements above, complete the 'Analysis'. (Round "fixed asset turnover ratio" answer to 2 decimal places.) Analyze how well Parts Unlimited manages its assets: (a) Calculate the fixed asset turnover ratio for the year, using the total amount of property, plant, and equipment (net of accumulated deprecation). If the industry average fixed asset turnover is 0.75, is the company more or less efficient at generating sales with its fixed assets than other companies in the same industry? (Hint: For the amount of fixed assets, use the net amount of all tangible long-term assets.) The fixed asset turnover ratio is: The company is more efficient at generating sales with its fixed assets. True (b) Suppose the equipment purchased on April 1, 2021, had been depreciated using the units of production method. At the time of purchase, expected output was 20,000 units, and actual production for 2021 was 2,000 units. Calculate the amount of depreciation expense that would have been recorded and determine the difference in net income and total assets for 2021 (ignoring tax effects). Units-of-production depreciation: Depreciation expense under units-of-production method is higher. (True or False) Income and total assets in 2021 would have been True lower by (c) The transaction on June 30, 2021, shows the company purchased a patent for $40,000 from a third-party marketing company. Suppose the company instead spent $40,000 to internally develop the new packaging technology, which it then patented. Calculate the difference in net income and total assets for 2021 (ignoring tax effects). Additional expense for 2021 The income and total assets in 2021 would have been higher. (True or False) False