Guttery Corporation has provided the following financial data from its balance sheet: Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000. The company's total asset turnover for Year 2 is closest to:

Question

Guttery Corporation has provided the following financial data from its balance sheet:  Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000. The company's total asset turnover for Year 2 is closest to:

Quizplus · Accepted Answer

Total asset turnover = Sales ÷ Average total assets*
= $1,450,000 ÷ $1,243,000 = 1.17 (rounded)
*Average total assets = ($1,236,000 + $1,250,000)÷ 2 = $1,243,000

Guttery Corporation Has Provided the Following Financial Data from Its