A is corrent. The requirement is to determine the amount of Kohl’s average total assets for the year using the financial ratios presented. Accounts receivable turnover is equal to sales divided by average receivables, and total assets turnover is equal to sales divided by average total assets. Therefore, A is corrent because sales is calculated to be $2,000,000 (10 × $200,000), and average total assets is calculated to be $1,000,000 ($2,000,000 ÷ 2).
B is incorrect because this is the amount of sales.
C is incorrect because it is the amount of average receivables.
D is incorrect. Accounts receivable turnover is equal to sales divided by average receivables, and total assets turnover is equal to sales divided by average total assets. Therefore, this answer is correct because sales is calculated to be $2,000,000 (10 × $200,000), and average total assets is calculated to be $1,000,000 ($2,000,000 ÷ 2).
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