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Question: Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. Income Statement For the Year Ended December 31, Year 2 Sales (all on account) Cost of goods sold Gross margin Operating expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $1,340,000 830,000 510,000 465,143 44,857 9,000 35,857 10,757 $25,100 The company's return on total assets for Year 2 is closest to: a) 2.09%. b) 1.66%. e) 2.67%. d) 2.08%.

Question: Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. Income Statement For the Year Ended December 31, Year 2 Sales (all on account) Cost of goods sold Gross margin Operating expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $1,340,000 830,000 510,000 465,143 44,857 9,000 35,857 10,757 $25,100 The company's return on total assets for Year 2 is closest to: a) 2.09%. b) 1.66%. e) 2.67%. d) 2.08%.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question: Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. Income Statement For the Year Ended December 31, Year 2 Sales (all on account) Cost of goods sold Gross margin Operating expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $1,340,000 830,000 510,000 465,143 44,857 9,000 35,857 10,757 $25,100 The company's return on total assets for Year 2 is closest to: a) 2.09%. b) 1.66%. e) 2.67%. d) 2.08%.
Transcribed Image Text:Question: Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. Income Statement For the Year Ended December 31, Year 2 Sales (all on account) Cost of goods sold Gross margin Operating expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $1,340,000 830,000 510,000 465,143 44,857 9,000 35,857 10,757 $25,100 The company's return on total assets for Year 2 is closest to: a) 2.09%. b) 1.66%. e) 2.67%. d) 2.08%.
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