How do you compute the book value and the total asset turnover for question 2 an

Question

How do you compute the book value and the total asset turnover for question 2 and 3?

Selected ledger account balances for Business Solutions follow. Assume that Business Solutions does not acquire additional office equipment or computer equipment in 2016. Compute amounts for the year ended December 31. 2016. for Depreciation expense-Office equipment and for Depreciation expense-Computer equipment (assume use of the straight-line method). Given the assumptions in part 1. what is the book value of both the office equipment and the computer equipment as of December 31. 2016? Compute the three-month total asset turnover for Business Solutions as of March 31. 2016. (Round your answer to 2 decimal places.)

Explanation / Answer

Basic calculations Particulars As on Dec 31, 2015 As on Mar 31, 2016 Difference ( Depreciation Expenditure for 3 months) Accumulated Depreciation office equipment 400 800 400 Accumulated Depreciation computer equipment 1250 2500 1250 Note : Difference is the Depreciation expenditure for 3 months( From Dec 31, 2015 to Mar 31, 2016 ) No of months from Dec 31, 2015 to Dec 31, 2016 is 12 months 1 Depreciation expenditure Particulars Depreciation expenditure for 3 months Depreciation expenditure for 1 months Depreciation expenditure for 12 months Office equipment 400 133.33 1600 Computer equipment 1250 416.67 5000 2 Book Value of the as on Dec 3, 2016. Particulars Book Value as on Dec 31, 2015 Depreciation expenditure for 12 months Book Value as on Dec 31, 2016. (Book Value as on Dec 31, 2015. - Depreciation of 12 months) Office equipment 8000 1600 6400 Computer equipment 20000 5000 15000 3 Assets Turnover ratio Assets Turnover ratio = Net sales / Average total assets Net sales as on Mar 31, 2016. 44000 Net assets as on Mar 31, 2016. 120268 44000/120268 0.37

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