1/ A company had average total assets of $912,000. Its gross sales were $1,089,0

Question

1/ A company had average total assets of $912,000. Its gross sales were $1,089,000 and its net sales were $985,000. The company's total asset turnover equals:

Multiple Choice

0.93.

1.11.

1.23.

0.84.

1.08

2/ Riverboat Adventures pays $340,000 plus $6,000 in closing costs to buy out a competitor. The real estate consists of land appraised at $36,000, a building appraised at $151,200, and paddleboats appraised at $172,800. Compute the cost that should be allocated to the building.

Multiple Choice

$142,800.

$145,320.

$151,200.

$217,896.

$78,624.

Explanation / Answer

1 Asset turnover = 1089000/985000= 1.11 2 Cost that should be allocated to the building = 346000/(36000+151200+172800)*151200=145320

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