Exchange corp. is a company that acts as a facilitator in tax-favored real estate swaps. such swaps, know as 1031 exchanges, per
mit participants to avoid some or all of the capital gains taxes that would otherwise be due. the bookkeeper for the company has been asked to prepare a report for the company to help its owner/manager analyze performance. the first such report appears below:
1 answer:
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Answer:
Capital turnover = 2.5 times
Explanation:
given data
Sales = $2,000,000
Operating income = $400,000
Total assets = $800,000
Current liabilities = $120,000
Target rate of return = 13%
Weighted average cost of capital = 6%
to find out
Portland Porcelain Works Coffee Mug Division capital turnover
solution
we get here Portland Porcelain Works Coffee Mug Division capital turnover that is find here by dividing sales by total assets
so
Capital turnover = ......................1
put here value
Capital turnover =
Capital turnover = 2.5 times