Dahn Corporation has provided the following financial data: Dividends on common
ID: 2593275 • Letter: D
Question
Dahn Corporation has provided the following financial data:
Dividends on common stock during Year 2 totaled $1,600. The market price of common stock at the end of Year 2 was $2.37 per share.
The company’s total asset turnover for Year 2 is closest to:
Balance Sheet December 31, Year 2 and Year 1 Assets Year 2 Year 1 Current assets: Cash $ 227,000 $ 150,000 Accounts receivable, net 134,000 130,000 Inventory 150,000 130,000 Prepaid expenses 83,000 80,000 Total current assets 594,000 490,000 Plant & equipment, net 769,000 840,000 Total assets $ 1,363,000 $ 1,330,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 200,000 $ 180,000 Accrued liabilities 63,000 70,000 Notes payable, short term 71,000 60,000 Total current liabilities 334,000 310,000 Bonds payable 290,000 290,000 Total liabilities 624,000 600,000 Stockholders’ equity: Common stock, $5 par value 400,000 400,000 Additional paid-in capital 50,000 50,000 Retained earnings 289,000 280,000 Total stockholders’ equity 739,000 730,000 Total liabilities & stockholders’ equity $ 1,363,000 $ 1,330,000Explanation / Answer
Answer:
Total Assets turn over =1.02
Working notes for the answer:
Total Assets turn over
=sales / average total assets
= 1,370,000 / (1,363,000+ 1,330,000)/2
= 1,370,000 / 1,346,500
=1.02
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