A. Compute the return on average total assets. B. Compute the return on average ordinary shareholders' equity.
A. Compute the return on average total assets. B. Compute the return on average ordinary shareholders' equity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Selected financial data from the September 30 year-end statements of Green
Company are given below:
Interest expense on long-term debt
P95,000.00
Profit
P480,000.00
Total Assets
P5,100,000.00
12% interest bearing long term debt*
P760,000.00
7% Preference shares, P100 par
P900,000.00
Total Stockholders' equity
P3,200,000.00
*This is the only interest bearing liability
Green Company has.
The Company's tax rate is 25%. Total assets at the beginning of the year was
P4,800,000 and total
stockholders' equity was P2,900,000. There has been no change on the preference
shares during the
year. Required:
A. Compute the return on average total
assets.
B. Compute the return on average ordinary
shareholders' equity.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f450c18-c167-476d-99dc-f24557a8a285%2F6ef0d847-7fcd-46d5-9eb3-b2fb716a3da4%2Fmc4xbm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Selected financial data from the September 30 year-end statements of Green
Company are given below:
Interest expense on long-term debt
P95,000.00
Profit
P480,000.00
Total Assets
P5,100,000.00
12% interest bearing long term debt*
P760,000.00
7% Preference shares, P100 par
P900,000.00
Total Stockholders' equity
P3,200,000.00
*This is the only interest bearing liability
Green Company has.
The Company's tax rate is 25%. Total assets at the beginning of the year was
P4,800,000 and total
stockholders' equity was P2,900,000. There has been no change on the preference
shares during the
year. Required:
A. Compute the return on average total
assets.
B. Compute the return on average ordinary
shareholders' equity.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education