Ending total assets are $1,500,000, inventory turnover is 6.0 times, net sales are $8,000,000 and the asset turnover is 4.0 times. Given that gross sales are $9,000,000, what is the beginning total asset balance

$2,500,000

Explanation:

Data provided

Ending assets = $1,500,000

Inventory turnover = 6.0 times

Net sales = $8,000,000

The computation of beginning total asset balance is shown below:-

Average total assets = $8,000,000 ÷ 4

= $2,000,000

Total assets = $2,000,000 × 2

= $4,000,000

Beginning assets  = Total assets - Ending assets

= $4,000,000  - 1,500,000

= $2,500,000

Therefore we applied the above formula

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