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27 December, 02:06

Financial statement data for years ending December 31, 2019 and 2018, for Edison Company follow: 2019 2018 Sales $513,500 $480,000 Total assets: Beginning of year 360,000 280,000 End of year 430,000 360,000 a. Determine the asset turnover for 2019 and 2018. Round your answers to one decimal place.

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  1. 27 December, 03:42
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    The answer is

    For 2018 - 1.5

    For 2019 - 1.3

    Explanation:

    Asset turnover ratio=Net sales/average total assets

    For 2018:

    Sales - $480,000

    Beginning asset - 360,000

    Ending asset - 360,000

    Average total asset:

    ($280,000 + $360,000) / 2

    =$320,000

    Therefore, asset turnover for 2018 is:

    $480,000/$320,000

    =1.5

    For 2019:

    Sales - $513,500

    Beginning asset - $360,000

    Ending asset - $430,000

    Average total asset:

    ($360,000 + $430,000) / 2

    =$395,000

    Therefore, asset turnover for 2019 is:

    $513,500/$395,000

    =1.3
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