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Analyze Fixed Assets Tabor Industries is a technology company that operates in a highly competitive environment. In 2016, management had significantly curtailed its capital expenditures due to cash flow problems. Tabor reported the following information for 2019: • Net fixed assets (beginning of year), $489,000 • Net fixed assets (end of year), $505,000 • Net sales, $1,025,000 • Accumulated depreciation (end of year), $543,000 • Depreciation expense, $126,000 An analyst reviewing Tabor’s financial history noted that Tabor had previously reported fixed asset turnover ratios and average age of its assets as follows: During this time frame, the industry average fixed asset turnover ratio is 2.46 and the industry average age of assets is 1.79 years. Required: 1. Compute Tabor’s fixed asset turnover ratio for 2019. 2. Compute the average age of Tabor’s fixed assets for 2019. 3. CONCEPTUAL CONNECTION Comment on Tabor’s fixed asset turnover ratios and the average age of the fixed assets.

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

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Chapter
Section
Chapter 7, Problem 61E
Textbook Problem

Analyze Fixed Assets

Tabor Industries is a technology company that operates in a highly competitive environment. In 2016, management had significantly curtailed its capital expenditures due to cash flow problems. Tabor reported the following information for 2019:

• Net fixed assets (beginning of year), $489,000

• Net fixed assets (end of year), $505,000

• Net sales, $1,025,000

• Accumulated depreciation (end of year), $543,000

• Depreciation expense, $126,000

An analyst reviewing Tabor’s financial history noted that Tabor had previously reported fixed asset turnover ratios and average age of its assets as follows:

Chapter 7, Problem 61E, Analyze Fixed Assets Tabor Industries is a technology company that operates in a highly competitive

During this time frame, the industry average fixed asset turnover ratio is 2.46 and the industry average age of assets is 1.79 years.

Required:

1. Compute Tabor’s fixed asset turnover ratio for 2019.

2. Compute the average age of Tabor’s fixed assets for 2019.

3. CONCEPTUAL CONNECTION Comment on Tabor’s fixed asset turnover ratios and the average age of the fixed assets.

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Chapter 7 Solutions

Cornerstones of Financial Accounting
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