Assume that all statement of financial position amounts for Remington Company represent average balance figures. What is the return on ordinary shareholders' equity ratio for Remington?

Question

Assume that all statement of financial position amounts for Remington Company represent average balance figures.  What is the return on ordinary shareholders' equity ratio for Remington?

Quizplus · Accepted Answer

The formula for return on ordinary shareholders' equity ratio is:
Net Income / Average Ordinary Shareholders' Equity
We do not have the net income figure provided in the question, but we have all other figures. The average shareholders' equity figure is $186,000.
Considering the answer choices, the only possible calculation which gives a ratio between 10% to 18% is Option B: 
Net Income / $186,000 = 18%
Net Income = $33,480

Assume That All Statement of Financial Position Amounts for Remington