Question

franco co. reported net sales of $10,000 in year 2 and $8,000 in year 1. franco reported total assets of $18,000 in year 2 and $22,000 in year 1. total asset turnover for year 2 would equal (answer should be a decimal number). hint: compute average total assets first.

Answer 1

The total asset turnover for year 2 is 0.50.

Step-by-step explanation:

To calculate the total asset turnover for year 2, we first need to calculate the average total assets. The formula for average total assets is:

Average Total Assets = (Total Assets in Year 2 + Total Assets in Year 1) / 2

Using the given information, we can calculate:

Average Total Assets = ($18,000 + $22,000) / 2 = $20,000

Next, we can use the formula for total asset turnover:

Total Asset Turnover = Net Sales / Average Total Assets

Plugging in the values, we get:

Total Asset Turnover = $10,000 / $20,000 = 0.50

Therefore, the total asset turnover for year 2 is 0.50.