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?

Question

Quizplus · Accepted Answer

Asset turnover = Net credit sales ÷ Average assets
Asset turnover = ($850,000 - $15,000 - $5,000)÷ $500,000 = $830,000 ÷ $500,000 = 1.66 times

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