Markus Company’s common stock sold for $4.75 per share at the end of this year. The company paid preferred stock dividends totaling $4,400 and a common stock dividend of $1.09 per share this year. It also provided the following data excerpts from this year’s financial statements: Ending Balance Beginning Balance Cash$44,000 $43,200 Accounts receivable$92,000 $66,200 Inventory$73,300 $92,000 Current assets$209,300 $201,400 Total assets$750,000 $809,000 Current liabilities$84,000 $87,000 Total liabilities$210,000 $189,000 Preferred stock$50,000 $50,000 Common stock, $1 par value$108,000 $108,000 Total stockholders’ equity$540,000 $620,000 Total liabilities and stockholders’ equity$750,000 $809,000 This Year Sales (all on account)$1,080,000 Cost of goods sold$626,400 Gross margin$453,600 Net operating income$276,500 Interest expense$14,000 Net income$166,400 Required:What is the return on total assets (assuming a 30% tax rate)? (Round your answer to 1 decimal place.)

Return on assets is one kind of profitability ratio. This ratio determines how effectively companies…

Answered: Markus Company’s common stock sold for…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter15: Statement Of Cash Flows

Section: Chapter Questions

Problem 11E

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Markus Company’s common stock sold for $4.75 per share at the end of this year. The company paid preferred stock dividends totaling $4,400 and a common stock dividend of $1.09 per share this year. It also provided the following data excerpts from this year’s financial statements:

	Ending Balance	Beginning Balance
Cash	$	44,000	$	43,200
Accounts receivable	$	92,000	$	66,200
Inventory	$	73,300	$	92,000
Current assets	$	209,300	$	201,400
Total assets	$	750,000	$	809,000
Current liabilities	$	84,000	$	87,000
Total liabilities	$	210,000	$	189,000
Preferred stock	$	50,000	$	50,000
Common stock, $1 par value	$	108,000	$	108,000
Total stockholders’ equity	$	540,000	$	620,000
Total liabilities and stockholders’ equity	$	750,000	$	809,000

	This Year
Sales (all on account)	$	1,080,000
Cost of goods sold	$	626,400
Gross margin	$	453,600
Net operating income	$	276,500
Interest expense	$	14,000
Net income	$	166,400

Required:

What is the return on total assets (assuming a 30% tax rate)? (Round your answer to 1 decimal place.)

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Thank you so much for your help, it is saying this is incorrect though. :(

Chapter 13
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Markus Company's common stock sold for $4.75 per share at the end of this year. The
company paid preferred stock dividends totaling $4,400 and a common stock dividend
of $1.09 per share this year. It also provided the following data excerpts from this year's
financial statements:
Cash
Accounts receivable
Inventory
Current assets
Total assets
Current liabilities
Total liabilities
Sales (all on account)
Cost of goods sold
Gross margin
Net operating income
Interest expense
Net income
This Year
$1,080,000
$ 626,400
$ 453,600
$ 276,500
$ 14,000
$ 166,400
Saved
Ending
Balance
$ 44,000
$ 92,000
$ 73,300
$209,300
> Answer is complete but not entirely correct.
Return on total
assets
23.1 X %
Beginning
Balance
$750,000
$
$ 84,000 $ 87,000
$ 210,000
$
Preferred stock
$ 50,000
$ 50,000
Common stock, $1 par value
$ 108,000
$
Total stockholders' equity
$540,000 $
Total liabilities and stockholders' equity $750,000
$
$ 43,200
$ 66,200
$ 92,000
$
201,400
809,000
189,000
108,000
620,000
Required:
What is the return on total assets (assuming a 30% tax rate)? (Round your answer to 1
decimal place.)
809,000

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