Income statement: Sales Cost of goods sold Net income 20X2 $2,500,000 1,300,000 200,000 Balance sheets: Accounts...

Question

Question

Income statement: Sales Cost of goods sold Net income 20X2 $2,500,000 1,300,000 200,000 Balance sheets: Accounts receivable T

The return on shareholders equity for 20X2 is: Multiple Choice O 20% O 8% O 22.22% O 25%

Multiple Choice O 1.25 O 0.80 O 1.32 O 0.72

business accounting

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Answer 1

Answer #1

Answer :-

1. Return on stockholders' equity = Net income/ Average stockholders' equity

Return on stockholders' equity = $200,000/[($900,000 + $700,000)/2]

Return on stockholders' equity = $200,000/$800,000

Return on stockholders' equity = 25%

So the correct answer is option D. ( 25%)

2. Assets Turnover = Net Sales / Average total assets

Assets Turnover = $2,500,000/[($2,000,000+$1,800,000)/2]

Assets Turnover = $2,500,000/$1,900,000

Assets Turnover = 1.32

So the correct answer is option C. ( 1.32)

If you have any query feel free to ask in comment section. Thanks

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Answer 2

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