Compute the three-month total asset turnover

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Reference no: EM131774575

Problem - Select ledger account balances for Success System follow.

 

For Three Months Ending December 31, 2009

For Three Months Ending March 31, 2010

Office equipment

$8,000

$8,000

Accumulated depreciation office equipment

400

800

Computer equipment

20,000

20,000

Accumulated depreciation Computer equipment

1,250

2,500

Total revenue

31,284

43,853

Total assets

93,248

129,909

Required -

1. Assume that Success System does not acquire additional office equipment or computer equipment in 2010. Compute the amounts for the year ended December 31, 2010. For Depreciation Expense-Office Equipment and for Depreciation Expense-Computer Equipment (assume use of the straight-line method).

2. Give the assumptions in part 1, what is the book value of both the office equipment and the computer equipment as of December 31, 2010?

3. Compute the three-month total asset turnover for Success System as of march 31, 2010. Use total revenue for the numerator and average the December 31, 2009, total assets for the denominator. Interpret its total asset turnover if competitors average 2.5 for annual periods.

Reference no: EM131774575

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