Waystation Company reported the following asset values in 2011 and 2012:

In addition, Waystation had sales of $4,000,000 in 2012. Cost of goods sold for the year was $2,500,000.
As of the end of 2011, the fair value of Waystation€™s total assets was $2,500,000. Of the excess of fair value over book value, $50,000 resulted because the fair value of Waystation€™s inventory was greater than its recorded book value. As of the end of 2012, the fair value of Waystation€™s total assets was $3,500,000. As of December 31, 2012, the fair value of Waystation€™s inventory was $100,000 greater than the inventory€™s recorded book value.
Required:
1. Compute Waystation€™s fixed asset turnover ratio for 2012.
2. Using the fair value of fixed assets instead of the book value of fixed assets, recomputed Waystation€™s fixed asset turnover ratio for 2012. State any assumptions that you make.
3. Interpretive Question: Waystation€™s primary competitor is Handy Corner. Handy Corner€™s fixed asset turnover ratio for 2012, based on publicly available information, is 2.8 times. Is Waystation more or less efficient at using its fixed assets than Handy Corner? Explain youranswer.

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2012 2011 $ 30,000 400,000 500,000 200,000 Cash Accounts receivable 500,000 700,000 300,000 800,000 400,000 Inventory. Land Buildings 600,000 Equipment