The balance sheets at the end of each of the first 2 years of operations indicate the following: Year 2 Year 1 Total current assets $631,000 $563,000 Total investments 63,000 43,000 Total property, plant, and equipment 901,000 701,000 Total current liabilities 150,000 80,000 Total long-term liabilities 350,000 250,000 Preferred 9% stock, $100 par 100,000 100,000 Common stock, $10 par 600,000 600,000 Paid-in capital in excess of par—common stock 60,000 60,000 Retained earnings 330,000 210,000 If net income is $127,000 and interest expense is $32,000 for Year 2, what is the return on total assets for Year 2? (Round percent to one decimal place.) a.8.8% b.11.0% c.92.9% d.None of these choices are correct.
The balance sheets at the end of each of the first 2 years of operations indicate the following: Year 2 Year 1 Total current assets $631,000 $563,000 Total investments 63,000 43,000 Total property, plant, and equipment 901,000 701,000 Total current liabilities 150,000 80,000 Total long-term liabilities 350,000 250,000 Preferred 9% stock, $100 par 100,000 100,000 Common stock, $10 par 600,000 600,000 Paid-in capital in excess of par—common stock 60,000 60,000 Retained earnings 330,000 210,000 If net income is $127,000 and interest expense is $32,000 for Year 2, what is the return on total assets for Year 2? (Round percent to one decimal place.) a.8.8% b.11.0% c.92.9% d.None of these choices are correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The balance sheets at the end of each of the first 2 years of operations indicate the following:
If net income is $127,000 and interest expense is $32,000 for Year 2, what is the return on total assets for Year 2? (Round percent to one decimal place.)
| Year 2 | Year 1 | |
| Total current assets | $631,000 | $563,000 |
| Total investments | 63,000 | 43,000 |
| Total property, plant, and equipment | 901,000 | 701,000 |
| Total current liabilities | 150,000 | 80,000 |
| Total long-term liabilities | 350,000 | 250,000 |
| 100,000 | 100,000 | |
| Common stock, $10 par | 600,000 | 600,000 |
| Paid-in capital in excess of par—common stock | 60,000 | 60,000 |
| 330,000 | 210,000 |
If net income is $127,000 and interest expense is $32,000 for Year 2, what is the return on total assets for Year 2? (Round percent to one decimal place.)
a.8.8%
b.11.0%
c.92.9%
d.None of these choices are correct.
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