Use the following information for questions 60 through 63.
Information for Ramirez Corp. is given below: Additional information:
There are no preferred dividends in arrears, the balances in the Accounts Receivable and Inventory accounts are unchanged from January 1, 2015, and there were no changes in the Bonds Payable, Preferred Stock, or Common Stock accounts during 2015. Assume that preferred dividends for the current year have not been declared.
-The rate of return for 2015 based on the year-end common stockholders' equity was
A) 700 ÷ 2,346.
B) 700 ÷ 2,376.
C) 670 ÷ 2,346..
D) 670 ÷ 2,376.

Question

Use the following information for questions 60 through 63.
Information for Ramirez Corp. is given below:  Additional information:
There are no preferred dividends in arrears, the balances in the Accounts Receivable and Inventory accounts are unchanged from January 1, 2015, and there were no changes in the Bonds Payable, Preferred Stock, or Common Stock accounts during 2015. Assume that preferred dividends for the current year have not been declared.
-The rate of return for 2015 based on the year-end common stockholders' equity was
A) 700 ÷ 2,346. 
B) 700 ÷ 2,376. 
C) 670 ÷ 2,346.. 
D) 670 ÷ 2,376.

Quizplus · Accepted Answer

The rate of return is calculated by dividing the net income by the year-end common stockholders' equity. Option C correctly represents this calculation with 670 (net income) divided by 2,346 (year-end common stockholders' equity).

Use the Following Information for Questions 60 Through 63