Problem - Select ledger account balances for Success System follow.
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For Three Months Ending December 31, 2009
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For Three Months Ending March 31, 2010
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Office equipment
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$8,000
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$8,000
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Accumulated depreciation office equipment
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400
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800
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Computer equipment
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20,000
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20,000
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Accumulated depreciation Computer equipment
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1,250
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2,500
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Total revenue
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31,284
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43,853
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Total assets
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93,248
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129,909
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Required -
1. Assume that Success System does not acquire additional office equipment or computer equipment in 2010. Compute the amounts for the year ended December 31, 2010. For Depreciation Expense-Office Equipment and for Depreciation Expense-Computer Equipment (assume use of the straight-line method).
2. Give the assumptions in part 1, what is the book value of both the office equipment and the computer equipment as of December 31, 2010?
3. Compute the three-month total asset turnover for Success System as of march 31, 2010. Use total revenue for the numerator and average the December 31, 2009, total assets for the denominator. Interpret its total asset turnover if competitors average 2.5 for annual periods.