Question 1: Cisco System reported the following information in its 2009 financial statements ($ in millions):
2009 2008
Balance sheets $4,043 $4,151
Property, plant, and equipment (net)
Income statement $36,117
Net sales for 2009
Required:
1. Calculate Cisco's 2009 fixed-asset turnover ratio
2. How would you interpret this ratio?
Question 2: Funseth Farms, purchased a tractor in 2008 at a cost of $30,000. The tractor was sold for $3,000 in 2011. Depreciation recorded through the disposal date totaled $26,000.
1. Prepare the journal entry to record the sale.
2. Assuming that the tractor was sold for $10,000, prepare the journal entry to record the sale.