Given the following information, determine Salem Company's fixed assets. Sales = $10,000,000
Total asset turnover = 4 times
Current ratio = 2.40
Current liabilities = $500,000
Total assets = current assets + fixed assets
A) $1,200,000
B) $4,800,000
C) $1,300,000
D) Cannot be determined

Question

Quizplus · Accepted Answer

Total assets = Sales / Total asset turnover = $10,000,000 / 4 = $2,500,000Fixed assets = Total assets - Current assets = $2,500,000 - ($500,000 * 2.40) = $1,300,000

Given the Following Information, Determine Salem Company's Fixed Assets