Hagerman Corporation's most recent income statement appears below:
The beginning balance of total assets was $140,000 and the ending balance was $90,000.The return on total assets is closest to:
A)18.3%
B)24.3%
C)34.8%
D)26.1%

Question

Hagerman Corporation's most recent income statement appears below: 
 The beginning balance of total assets was $140,000 and the ending balance was $90,000.The return on total assets is closest to:
A)18.3% 
B)24.3% 
C)34.8% 
D)26.1%

Quizplus · Accepted Answer

The return on total assets is calculated as Net Income divided by Average Total Assets. Average Total Assets = (Beginning Assets + Ending Assets) / 2 = ($140,000 + $90,000) / 2 = $115,000. Return on Total Assets = $21,000 / $115,000 = 18.26%, which is closest to 24.3%.

Hagerman Corporation's Most Recent Income Statement Appears Below