29) Use the below information to answer the following question. 29) Net sales CO

Question

29) Use the below information to answer the following question. 29) Net sales COGS Depreciation ESIT Interest Taxable income Taxes For the Year $631,000 442.200 28.100 $160,700 14.900 $145.800 49.800 S 96.200 Net income Balance Shee Beginning of Year Cash Accounts receivable Inventory Net fixed assets Total assets s 38.200 91.400 203,900 516.100 End of Year 43,700 86.150 214,600 537.950 Accounts payable Long-term debt Common stock ($1 par value) $136.100 329.500 75.000 S104.300 298.200 82.000 Retained earnings Total Liab. & Equity What is the return on equity using year-end values? S849.600 $882.400 A) 15.38 percent B) 20.05 percent C) 25.05 percent D) 24.26 percent E) 19.96 percent 10

Explanation / Answer

Shareholders equity = Common stock + retained earnings

Shareholders equity = 82,000 + 397,900

Shareholders equity = $479,900

Return on equity = ( net income / shareholders equity ) * 100

Return on equity = ( 96,200 / 479,900 ) * 100

Return on equity = 20.05%

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