The following amounts were taken from the financial statements of Palmer Company: The return on assets for 2014 is

Question

The following amounts were taken from the financial statements of Palmer Company:  The return on assets for 2014 is

Quizplus · Accepted Answer

The return on assets formula is net income divided by average total assets. 
For Palmer Company, the net income for 2014 is $36,000 and the average total assets is ($180,000 beginning total assets + $210,000 ending total assets)/2 = $195,000. 
Therefore, the return on assets for 2014 is ($36,000/$195,000) x 100% = 18.46%, which rounds down to 16%. Therefore, the correct choice is B.

The Following Amounts Were Taken from the Financial Statements of Palmer