1/ Spears Co. had net sales of $43,404 million. Its average total assets for the

Question

1/ Spears Co. had net sales of $43,404 million. Its average total assets for the period were $15,302 million. Spears' total asset turnover equals:

Multiple Choice

0.35.

1.53.

4.34.

0.43.

2.84.

2/ Granite Company purchased a machine costing $130,000, terms 2/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,000. The machine requires special mounting and wiring connections costing $11,000. When installing the machine, $2,500 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.

Multiple Choice

$146,200.

$148,800.

$141,400.

$141,600.

$140,900.

Explanation / Answer

1 Total asset turnover =43404/15302= 2.84 2 Invoice price 130000 Freight charges 3000 Mounting and wiring 11000 Less: Discount -2600 Cost recorded 141400

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