Net sales are $2,700,000, beginning total assets are $700,000, and the asset turnover is 3.0.What is the ending total asset balance?

Question

Quizplus · Accepted Answer

Asset turnover = net sales / average total assets 
3.0 = 2,700,000 / (beginning total assets + ending total assets) / 2 
Solving for ending total assets: 
3.0 = 2,700,000 / (700,000 + ending total assets) / 2 
1.5 = 2,700,000 / (700,000 + ending total assets) 
1.5(700,000 + ending total assets) = 2,700,000 
1,050,000 + 1.5ending total assets = 2,700,000 
1.5ending total assets = 1,650,000 
ending total assets = $1,100,000

Net Sales Are $2,700,000, Beginning Total Assets Are $700,000, and the Asset