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24 May, 01:00

Pizza, Inc. provides the following dа ta:

2019 2018

Assets

Current Assets:

Cash and Cash Equivalents $30,000 $25,000

Accounts Receivable, Net 37,000 62,000

Merchandise Inventory 59,000 50,000

Total Current Assets $126,000 137,000

Property, Plant, and Equipment, Net $124,000 120,000

Total Assets $250,000 $257,000

For the year ending December 31, 2019:

Net Credit Sales $510,000

Cost of Goods Sold (160,000)

Gross Profit $350,000

Calculate the asset turnover ratio for 2019. There are no cash sales. (Round your answer to two decimal places.)

a. 2.01 times

b. 4.05 times

c. 1.01 times

d. 0.64 times

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Answers (1)
  1. 24 May, 01:28
    0
    a. 2.01 times

    Explanation:

    Asset Turnover Ratio = Net Sales / Average Total Assets

    Asset Turnover Ratio = $510,000 / $253,500

    Asset Turnover Ratio = 2.01 times

    Asset Turnover Ratio > 1

    Net Sales > Average Assets
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