Roggers Corp.'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 assets turnover ratio formula:

Assets Turnover Ratio = Net Sales / Average Total Assets

Since we only have the beginning and ending total assets, we can calculate the average total assets as:

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
Average Total Assets = ($18,000,000 + $22,000,000) / 2
Average Total Assets = $20,000,000

Now we can rearrange the assets turnover ratio formula to solve for net sales:

Net Sales = Assets Turnover Ratio x Average Total Assets
Net Sales = 1.75 x $20,000,000
Net Sales = $35,000,000

Therefore, the amount of net sales for the year 2015 was $35,000,000, which corresponds to choice C.