A company that reports segment information had average total assets of $1,522,450 and total net income of $590,700. Segment A had average total assets of $927,800 and segment operating income of $298,300. Segment B had average assets of $594,650 and segment operating income of $292,400. The segment return on assets for Segment A is:
A) 60.9%.
B) 38.8%.
C) 32.2%.
D) 49.2%.
E) 50.5%.

Question

Quizplus · Accepted Answer

Segment return on assets (ROA) is calculated as segment operating income divided by average total assets.
For Segment A: 
Segment ROA = (Segment Operating Income / Average Total Assets) x 100%
Segment ROA = (298,300 / 927,800) x 100%
Segment ROA = 0.3218 x 100%
Segment ROA = 32.18%
Therefore, the correct answer is choice letter C.

A Company That Reports Segment Information Had Average Total Assets