Lesmerises Corporation's most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled $40 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $2.85 per share.
-The return on total assets for Year 2 is closest to:
A) 4.27%
B) 5.85%
C) 5.83%
D) 4.26%

Question

Lesmerises Corporation's most recent balance sheet and income statement appear below:   Dividends on common stock during Year 2 totaled $40 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $2.85 per share.
-The return on total assets for Year 2 is closest to:
A) 4.27% 
B) 5.85% 
C) 5.83% 
D) 4.26%

Quizplus · Accepted Answer

The return on total assets for Year 2 is calculated as net income divided by total assets. Net income for Year 2 is $1,000,000 and total assets for Year 2 are $17,100,000. Therefore, the return on total assets for Year 2 is $1,000,000 / $17,100,000 = 5.83%.

Lesmerises Corporation's Most Recent Balance Sheet and Income Statement Appear