Determine the dollar amount of total assets for a venture with the following financial information: revenues = $500,000; net profit = $70,000; and asset turnover = 2.0 times.
A)$100,000
B)$250,000
C)$375,000
D)$500,000

Question

Quizplus · Accepted Answer

Asset turnover is calculated as revenues divided by total assets. Given the asset turnover of 2.0, total assets can be calculated as revenues ($500,000) divided by asset turnover (2.0), which equals $250,000.

Determine the Dollar Amount of Total Assets for a Venture