The Miller Company reported gross sales of $850,000,sales returns and allowances of $15,000,and sales discounts of $5,000.The company has average total assets of $500,000,of which $250,000 is property,plant,and equipment.What is the company's asset turnover ratio? (Round your answer to 2 decimal places.)

Question

Quizplus · Accepted Answer

Asset turnover ratio is calculated by dividing the net sales by average total assets.

Net Sales = Gross Sales - Sales Returns and Allowances - Sales Discounts
= $850,000 - $15,000 - $5,000
= $830,000

Average Total Assets = $500,000

Asset Turnover Ratio = Net Sales / Average Total Assets
= $830,000 / $500,000
= 1.66 times

Therefore, the answer is C) 1.66 times.

The Miller Company Reported Gross Sales of $850,000,sales Returns and Allowances