Bountiful Company had sales of $650,000 and cost of merchandise sold of $200,000 during the year. The total assets balance at the beginning of the year was $175,000 and at the end of the year was $167,000. Calculate the ratio of sales to total assets.

Question

Quizplus · Accepted Answer

Sales to Total Assets Ratio = Sales / Total Assets
Sales = $650,000
Total Assets at the beginning of the year = $175,000
Total Assets at the end of the year = $167,000

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2

= ($175,000 + $167,000) / 2

= $171,000

Sales to Total Assets Ratio = $650,000 / $171,000

= 3.80

Therefore, the correct answer is B) 3.80.

Bountiful Company Had Sales of $650,000 and Cost of Merchandise