The following income statement and balance sheets for Virtual Gaming Systems are

Question

The following income statement and balance sheets for Virtual Gaming Systems are provided. VIRTUAL GAMING SYSTEMS Income or the year ended December 31, 2018 Net sales Cost of goods sold $3,001,000 1,943,000 Gross profit 1,058,000 Expenses Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense $851,000 27,000 7,300 11,500 41,000 Total expenses 937,800 Net income S 120,200 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2018 2017l Assets Current assets Cash Accounts receivable Inventory Prepaid rent $179,000$137 000 53.000 128.000 11.3005.160 74 000 98.000 Long-term assets 98,000 Investment in bonds Land Equipment Less: Accumulated depreciation 203000233,000 203,000 62 000)(35000) 263 000 Total assets 864 300$724 160 Liabilities and Stockholders' Equity Current liabilities: s 59 000$103/060 Accounts payable Interest payable Income tax pavable 4600 2.300

Explanation / Answer

Ending stockholders' equity = (293000+218200)= 511200 Return on equity = Net income/Ending stockholders' equity = 120200/511200= 23.5%

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