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SP 10 Selected ledger account balances for Business Solutions

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SP 10 Selected ledger account balances for Business Solutions follow.
For Three Months Ended December 31, 2011
For Three Months Ended March 31, 2012

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 44,000
Total assets . . . . . . . . . . .. . . ........ 83,460 120,268

Required

1. Assume that Business Solutions does not acquire additional office equipment or computer equipment in 2012. Compute amounts for the year ended December 31, 2012, for Depreciation Expense—Office Equip- ment and for Depreciation Expense—Computer Equipment (assume use of the straight-line method).

2. Given the assumptions in part 1, what is the book value of both the office equipment and the computer equipment as of December 31, 2012?

3. Compute the three-month total asset turnover for Business Solutions as of March 31, 2012. Use total rev- enue for the numerator and average the December 31, 2011, total assets and the March 31, 2012, total assets for the denominator. Interpret its total asset turnover if competitors average 2.5 for annual periods. (Round turnover to two decimals.)

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