Bundle: Financial & Managerial Accounting, 13th + CengageNOWv2, 2 terms (12 months) Printed Access Card
13th Edition
ISBN: 9781305618909
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 9, Problem 9.23EX
a.
To determine
Fixed Asset turnover: It is a ratio that measures the productive capacity of the fixed assets to generate the sales revenue for the company. Thus, it shows the relationship between the net sales and the average total fixed assets. The following is the formula to calculate the ratio:
the fixed asset Turnover Ratio for year 2.
b.
To determine
To interpret: Company V’s fixed asset turnover ratio.
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Fixed asset turnover ratio
Verizon Communications Inc. is a major telecommunications companyin the United States. Two recent balance sheets for Verzion disclosedthe following information regarding fixed assets:
Verizon's revenue for the years was $131,620 million. Assume that thefixed asset turnover ratio fort the telecommunications industry averagesapproximately 1.1
a. Determine Verizon's fixed asset turnover ratio. Round to one decimal place.
b. Interpet this ratio with respect to the industry average.
Comcast, Google, and Walmart: Fixed asset turnover ratio
The following table shows the sales and average book value of fixed assets for three different companies from three different industries for a recent year:
Average Book
Sales (in Value of Fixed Assets
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millions) (in millions)
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$28,536
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59,825
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Walmart Stores, Inc. (retail)
474,259
117,294
a. For each company, determine the fixed asset turnover ratio. (Round to one decimal place.)
Comcast:
Google:
Walmart:
b. Which of these statements are correct?
Asset turnover
United Continental Holdings, Inc., (UAL), operates passenger service throughout the world. The following data (in millions) were adapted from a recent financial statement of United.
Sales (revenue)
$38,901
Average property, plant, and equipment
17,219
Average intangible assets
8,883
1. Compute the asset turnover. Round your answer to two decimal places.fill in the blank 1
2. If Delta, has a recent asset turnover of 1.11, United Continental Holdings, Inc. is generating __________ more sales per average dollar of invested long-term operating assets than Delta. (Options: $1.49, $1.73. $1,995, $0.38)
Chapter 9 Solutions
Bundle: Financial & Managerial Accounting, 13th + CengageNOWv2, 2 terms (12 months) Printed Access Card
Ch. 9 - ONeil Office Supplies has a fleet of automobiles...Ch. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Distinguish between the accounting for capital...Ch. 9 - Immediately after a used truck is acquired, a new...Ch. 9 - Keyser Company purchased a machine that has a...Ch. 9 - Is it necessary for a business to use the same...Ch. 9 - a. Under what conditions is the use of an...Ch. 9 - For some of the fixed assets of a business, the...Ch. 9 - A. Over what period of time should the cost of a...
Ch. 9 - Capital and revenue expenditures On August 7,...Ch. 9 - Capital and revenue expenditures On February 14,...Ch. 9 - Prob. 9.2APECh. 9 - Straight-line depreciation A building acquired at...Ch. 9 - Prob. 9.3APECh. 9 - Units-of-activity depreciation A truck acquired at...Ch. 9 - Double declining-balance depreciation Equipment...Ch. 9 - Double-declining-balance depreciation A building...Ch. 9 - Prob. 9.5APECh. 9 - Revision of depreciation Equipment with a cost of...Ch. 9 - Sale of equipment Equipment was acquired at the...Ch. 9 - Sale of equipment Equipment was acquired at the...Ch. 9 - Prob. 9.7APECh. 9 - Prob. 9.7BPECh. 9 - Prob. 9.8APECh. 9 - Prob. 9.8BPECh. 9 - Fixed asset turnover ratio Financial statement...Ch. 9 - Prob. 9.9BPECh. 9 - Costs of acquiring fixed assets Melinda Staffers...Ch. 9 - Prob. 9.2EXCh. 9 - Prob. 9.3EXCh. 9 - Prob. 9.4EXCh. 9 - Capital and revenue expenditures Jackie Fox owns...Ch. 9 - Capital and revenue expenditures Quality Move...Ch. 9 - Nature of depreciation Tri-City Ironworks Co....Ch. 9 - Straight-line depreciation rates Convert each of...Ch. 9 - Prob. 9.9EXCh. 9 - Prob. 9.10EXCh. 9 - Depreciation by units-of-output method Prior to...Ch. 9 - Prob. 9.12EXCh. 9 - Depreciation by two methods A storage tank...Ch. 9 - Prob. 9.14EXCh. 9 - Revision of depreciation A building with a cost of...Ch. 9 - Prob. 9.16EXCh. 9 - Entries for sale of fixed asset Equipment acquired...Ch. 9 - Prob. 9.18EXCh. 9 - Prob. 9.19EXCh. 9 - Prob. 9.20EXCh. 9 - Prob. 9.21EXCh. 9 - Balance sheet presentation List the errors you...Ch. 9 - Prob. 9.23EXCh. 9 - Prob. 9.24EXCh. 9 - Asset traded for similar asset A printing press...Ch. 9 - Prob. 9.26EXCh. 9 - Prob. 9.27EXCh. 9 - Entries for trade of fixed asset On October 1,...Ch. 9 - Prob. 9.1APRCh. 9 - Prob. 9.2APRCh. 9 - Depreciation by three methods; partial years...Ch. 9 - Prob. 9.4APRCh. 9 - Transactions for fixed assets, including sale The...Ch. 9 - Amortization and depletion entries Data related to...Ch. 9 - Allocating payments and receipts to fixed asset...Ch. 9 - Prob. 9.2BPRCh. 9 - Prob. 9.3BPRCh. 9 - Prob. 9.4BPRCh. 9 - Transactions for fixed assets, including sale The...Ch. 9 - Amortization and depletion entries Data related to...Ch. 9 - Ethics and professional conduct in business Dave...Ch. 9 - Financial vs. tax depreciation The following is an...Ch. 9 - Effect of depreciation on net income Tuttle...Ch. 9 - Fixed asset turnover: three industries The...
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- Verizon Communications Inc. is a major telecommunications company in the United States. Two recent balance sheets for Verizon disclosed the following information regarding fixed assets: Verizons revenue for the year was 131,620 million. Assume that the fixed asset turnover ratio for the telecommunications industry averages approximately 1.1. a. Determine Verizons fixed asset turnover ratio. Round to one decimal place. b. Interpret this ratio with respect to the industry average.arrow_forwardFixed asset turnover ratio Select financial statement data for two recent years for Davenport Company are as follows: 20Y5 20Y4 Sales $1,800,000 $1,170,000 Fixed assets: Beginning of year 690,000 610,000 End of year 750,000 690,000 a. Determine the fixed asset turnover ratio for 20Y4 and 20Y5. Round to one decimal place. 20Y5 20Y4 Fixed Asset Turnover Ratio b. Does the change in the fixed asset turnover ratio from 20Y4 to 20Y5 indicate a favorable or an unfavorable change?arrow_forwardFixed Asset Turnover Ratio Financial statement data for years ending December 31 for Dennis Company follow: Year 2 Year 1 Sales $2,110,680 $2,167,200 Fixed assets: Beginning of year 540,000 492,000 End of year 542,400 540,000 a. Determine the fixed asset turnover ratio for Year 1 and Year 2. Round your answers to one decimal place. Fixed asset turnover Year 1 Year 2 b. Does the change in the fixed asset turnover ratio from Year 1 to Year 2 indicate a favorable or an unfavorable change? Unfavorable varrow_forward
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