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Asset Turnover

Financial statement data for the years ending December 31, 20Y3 and 20Y2, for Lawson Company follow:

		20Y3	20Y2
Sales		$873,000	$624,000
Total assets:
	Beginning of year	440,000	340,000
	End of year	530,000	440,000

a. Determine the asset turnover for 20Y3 and 20Y2. Round your answers to one decimal place.

	20Y3	20Y2
Asset turnover	fill in the blank 1	fill in the blank 2

b. Is the change in the asset turnover from 20Y2 to 20Y3 favorable or unfavorable?

FavorableUnfavorable

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Determining Gross Profit

During the current year, merchandise is sold for $45,870,000. The cost of the merchandise sold is $33,026,400.

a. What is the amount of the gross profit? $fill in the blank 1

b. Compute the gross profit percentage (gross profit divided by sales). fill in the blank 2%

c. When will the income statement necessarily report a net income?

If gross profit is positive.If operating expenses are less than gross profit.If operating expenses are more than gross profit.If revenues exceed cost of sales.None of these choices.

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   Determining Cost of Merchandise Sold

   For a recent year, Best Buy reported sales of $42,879 million. Its gross profit was $9,961 million. What was the amount of Best Buy's cost of merchandise sold? (Enter answer in millions.) $fill in the blank 1 million