Computing the asset turnover ratio Biagas, Inc. had net sales of $55,600,000 for the year ended May 31, 2018. Its beginning and ending total assets were $52,800,000 and $98,500,000, respectively. Determine Biagas’s asset turnover ratio for year ended May 31, 2018.
Asset turnover ratio is 0.7349.
Asset Turnover ratio defines as its measures the amount of net sales generated for each average dollar with the amount of total assets which have been invested.
Arca Salvage, Inc. purchased equipment for $10,000. Arca recorded total depreciation of $8,000 on the equipment. Assume that Arca exchanged the old equipment for new equipment, paying $4,000 cash. The fair market value of the new equipment is $5,000. Journalize Arca’s exchange of equipment. Assume this exchange has commercial substance.
Counselors of Atlanta purchased equipment on January 1, 2017, for $20,000. Counselors of Atlanta expected the equipment to last for four years and have a residual value of $2,000. Suppose Counselors of Atlanta sold the equipment for $8,000 on December 31, 2019, after using the equipment for three full years. Assume depreciation for 2019 has been recorded. Journalize the sale of the equipment, assuming straight-line depreciation was used.
Determining the cost of assets Lawson Furniture purchased land, paying $65,000 cash and signing a $250,000 note payable. In addition, Lawson paid delinquent property tax of $5,000, title insurance costing $4,000, and $9,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $400,000. It also paid $54,000 for a fence around the property, $12,000 for a sign near the entrance, and $8,000 for special lighting of the grounds. Requirements
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