Question: 1. Eastman Company reports the following ($ 000s): net sales of $13,557 for 2011 and $12,670 for 2010; end-of-year total assets of $14,968 for 2011 and $18,810 for 2010. Compute its total asset turnover for 2011, and assess its level if competitors average a total asset turnover of 2.0 times.
2. On April 1, 2010, Stone's Backhoe Co. purchases a trencher for $250,000. The machine is expected to last five years and have a salvage value of $25,000. Compute depreciation expense for both 2010 and 2011 assuming the company uses the straight-line method.