Roggers Company's beginning and ending total assets in the year 2015 were $18,000,000 and $22,000,000, respectively. Its assets turnover ratio for the year was calculated to be 1.75 times. Calculate the amount of net sales for the year 2015.

Question

Quizplus · Accepted Answer

We can use the formula: Net Sales = Assets Turnover Ratio x Average Total Assets
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
Average Total Assets = ($18,000,000 + $22,000,000) / 2 = $20,000,000
Net Sales = 1.75 x $20,000,000 = $35,000,000
Therefore, the correct choice is (C).

Roggers Company's Beginning and Ending Total Assets in the Year