Quick Computer Service had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.
A) 7.1%
B) 7.5%
C) 6.7%
D) 20.0%
E) 18.8%

Question

Quizplus · Accepted Answer

Return on assets = Net income / Average assetsNet income = Revenues - Expenses = $80,000 - $50,000 = $30,000Average assets = (Beginning assets + Ending assets) / 2 = ($400,000 + $450,000) / 2 = $425,000Return on assets = $30,000 / $425,000 = 7.1%

Quick Computer Service Had Revenues of $80,000 and Expenses of $50,000