During 2011, Rathke Corporation reported net sales of $2,500,000, net income of $1,200,000, and depreciation expense of $100,000.Rathke also reported beginning total assets of $1,000,000, ending total assets of $1,500,000, plant assets of $800,000, and accumulated depreciation of $500,000.Rathke's asset turnover ratio is

Question

Quizplus · Accepted Answer

The asset turnover ratio is calculated as net sales divided by average total assets. 
Average total assets can be calculated as (beginning total assets + ending total assets)/2. 
In this case, average total assets = ($1,000,000 + $1,500,000)/2 = $1,250,000 
So, the asset turnover ratio = $2,500,000/$1,250,000 = 2 times. 
Therefore, the correct answer is B) 2.0 times.

During 2011, Rathke Corporation Reported Net Sales of $2,500,000, Net