What is the return on total assets (assuming a 30% tax rate)? Markus Company's common stock sold for $2.75 per share at the end of this year. The company paid preferred stock dividends totalling $4,400 an a common stock dividend of $0.55 per share this year. It also provided the following data excerpts from this year's financial statements: Ending Balance Beginning Balance Cash Accounts receivable $35,000 $30,000 60,000 50,000 Inventory 55,000 60,000 Current assets 150,000 140,000 Total assets 450,000 460,000 Current liabilities 60,000 40,000 Total liabilities 130,000 120,000 Preferred stock 40,000 40,000 Common stock, $1 par value 80,000 80,000 Total stockholder's equity 320,000 340,000 Total liabilities and stockholder's equity 450,000 460,000 This Year Sales (all on account) $700,000 Cost of goods sold 400,000 Gross margin 300,000 Net operating income 140,000 Interest expense Net income 8,000 92,400

Managerial Accounting: The Cornerstone of Business Decision-Making
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter15: Financial Statement Analysis
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Problem 55E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...
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What is the return on total assets (assuming a 30% tax rate)?
Markus Company's common stock sold for $2.75 per share at the end of this year.
The company paid preferred stock dividends totalling $4,400 an a common stock
dividend of $0.55 per share this year. It also provided the following data excerpts
from this year's financial statements:
Ending Balance Beginning Balance
Cash
Accounts receivable
$35,000
$30,000
60,000
50,000
Inventory
55,000
60,000
Current assets
150,000
140,000
Total assets
450,000
460,000
Current liabilities
60,000
40,000
Total liabilities
130,000
120,000
Preferred stock
40,000
40,000
Common stock, $1 par value
80,000
80,000
Total stockholder's equity
320,000
340,000
Total liabilities and stockholder's equity 450,000
460,000
This Year
Sales (all on account) $700,000
Cost of goods sold
400,000
Gross margin
300,000
Net operating income 140,000
Interest expense
Net income
8,000
92,400
Transcribed Image Text:What is the return on total assets (assuming a 30% tax rate)? Markus Company's common stock sold for $2.75 per share at the end of this year. The company paid preferred stock dividends totalling $4,400 an a common stock dividend of $0.55 per share this year. It also provided the following data excerpts from this year's financial statements: Ending Balance Beginning Balance Cash Accounts receivable $35,000 $30,000 60,000 50,000 Inventory 55,000 60,000 Current assets 150,000 140,000 Total assets 450,000 460,000 Current liabilities 60,000 40,000 Total liabilities 130,000 120,000 Preferred stock 40,000 40,000 Common stock, $1 par value 80,000 80,000 Total stockholder's equity 320,000 340,000 Total liabilities and stockholder's equity 450,000 460,000 This Year Sales (all on account) $700,000 Cost of goods sold 400,000 Gross margin 300,000 Net operating income 140,000 Interest expense Net income 8,000 92,400
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