Question

Analysis of Operating Assets At December 31, 2017, XYZ Inc. has the following amounts on its...

Analysis of Operating Assets

At December 31, 2017, XYZ Inc. has the following amounts on its financial statements:

Property, plant, and equipment $15,000
Accumulated depreciation 6,000
Total assets at January 1, 2017 30,000
Total assets at December 31, 2017 40,000
Net sales 60,000
Depreciation expense 1,000

Calculate the following:

Average life of the assets: years
Average age of the assets: years
Asset turnover ratio (round to 2 decimal places): times

Homework Answers

Answer #1
Cost of Property, Pplant and equipment 15000
Annual depreciation 1000
Average life of assets 15years
(15000 /1000)
Accumulated depreciation 6000
Annual depreciation 1000
Age of assets at the end 6 years
Age of the assets in the beginning 5 years
Average age of asset 5.5 years
Average Total assets (30000+40000)/2 35000
Net sales 60000
Assets turnover ratio (Net sales/Average total asssets) 1.71
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