The following information pertains to Carlton Company. Assume that all balance s

Question

The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Liabilities and Stockholders' Equity

What is the rate earned on total assets for this company?

Select the correct answer.

Assets

Cash and short-term investments $35,504 Accounts receivable (net) 26,351 Inventory 27,117 Property, plant and equipment 273,614       Total Assets $362,586

Liabilities and Stockholders' Equity

  Current liabilities $63,045   Long-term liabilities 85,104   Stockholders' equity-common 214,437       Total liabilities and stockholders' equity $362,586 Income Statement   Net Sales $87,008   Cost of goods sold 34,803   Gross margin 52,205   Operating expenses 28,066   Net income from operations $24,139 Interest expense 4,350       Net income $19,789   Number of shares of common stock 5,449   Market price of common stock $29

Explanation / Answer

Answer for this as follows

Rated earned on total assets for this company = (operating income/TOTAL ASSETS)

i.e, 24,139/362586 = 6.7%

Ans :- C

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