During 2017,Sanchez Corp.had net sales of $16,400,000.The beginning total assets were $8,900,000.The asset turnover ratio was 1.7 times.Calculate the ending total assets of Sanchez.

Question

Quizplus · Accepted Answer

Asset turnover ratio = Net sales / Average total assets
Average total assets = Net sales / Asset turnover ratio
Average total assets = $16,400,000 / 1.7 = 9,647,059
Average total assets = (Beginning assets + Ending assets)/ 2
Ending assets = (Average total assets × 2)- Beginning assets
Ending assets = ($9,647,059 × 2)- $8,900,000 = $10,394,118