Dodgers Corp.'s beginning and ending total assets in the year 2019 were $19,900,000 and $22,100,000, respectively. Its asset turnover ratio for the year was calculated to be 1.8 times. Calculate the amount of net sales for the year 2019.

Question

Quizplus · Accepted Answer

We can use the formula for asset turnover ratio:

Net sales = Asset turnover ratio x Average total assets

Average total assets = (Beginning total assets + Ending total assets) / 2 
Average total assets = ($19,900,000 + $22,100,000) / 2 
Average total assets = $21,000,000

Net sales = 1.8 x $21,000,000 
Net sales = $37,800,000

Therefore, the amount of net sales for the year 2019 was $37,800,000, which is option C.