Determine the Dollar Amount of Total Assets for a Venture

question 91

Multiple Choice

Determine the dollar amount of total assets for a venture with the following financial information: revenues = $500,000; net profit = $70,000; and asset turnover = 2.0 times.

• A)$100,000
• B)$250,000
• C)$375,000
• D)$500,000

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Definitions:

Amortization

The gradual reduction of a debt or the cost of an intangible asset over a specific period of time through regular payments.

Net Income

The amount of earnings left over after all expenses and taxes have been subtracted from total revenue; a key indicator of a company's profitability.

Equity Method

An accounting technique used by a parent company to record its investments in subsidiaries or affiliates based on the equity stake's pro-rata share of net assets rather than the historical cost of the investment.

Stockholders' Equity

The remaining value of a company's assets after liabilities are subtracted, indicating the stake held by shareholders.