During 2018, Landers Corp. had net sales of $17,000,000. The beginning total assets were $8,300,000. The asset turnover ratio was 1.6 times. Calculate the ending total assets of Landers. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The asset turnover ratio is calculated as Net Sales divided by Average Total Assets. Given the asset turnover ratio of 1.6 and net sales of $17,000,000, we can find the average total assets: $17,000,000 / 1.6 = $10,625,000. The average total assets is the average of beginning and ending total assets: ($8,300,000 + Ending Total Assets) / 2 = $10,625,000. Solving for the ending total assets gives $12,950,000.