The correct answer is B . Can someone please explain how to calculate that final

Question

The correct answer is B. Can someone please explain how to calculate that final answer?

25) The Hummel Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year End of current year End of prior year Net sales revenue (all credit) Cost of goods sold Gross profit Selling/general expenses Interest expense Net income Current assets Long-term assets Total assets Current liabilities Long-term liabilities Common stockholders' equity Total liabilities and stockholders' equit $800,000 $504,000 $296,000 $184,000 $ 32,000 $ 80,000 $ 71,000 $329,000 $400,000 $ 56,000 $84,000 $260,000 $400,000 $20,000 $280,000 $300,000 $16,000 $164,000 $120,000 $300,000 Inventory and prepaid expenses account for $28,000 of the current year's current assets Average inventory for the current year is $12,000 Average net accounts receivable for the current year is $32,000 There are 40,000 shares of common stock outstanding Total dividends paid during the current year were $60,000 The market price per share of common stock is $25 What is the company's rate of return on total assets for the current year? A) 0.35% B) 32% C) 28% D) 22.86%

Explanation / Answer

Return on total assets =( net income + interest expense)/average total assets earnings has to before interest and tax hence we are adding interest expense Average total assets = (opening + ending assets)/2 (400,000+300,000)/2 350000 (80,000+32000)/350,000 0.32 or 32%

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