Degollado Corporation\'s most recent income statement appears below: Income Stat

Question

Degollado Corporation's most recent income statement appears below: Income Statement For the Year Ended December 31 Sales (all on account) Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $212,000 83,000 129,000 56,000 73,000 32,000 41,000 12,300 $ 28,7060 The beginning balance of total assets was $221,000 and the ending balance was $241,000 Required Compute the return on total assets. (Round your "Percentage" answer to 2 decimal places.) Return on total assets

Explanation / Answer

Average total assets = (221000+241000)/2= 231000 Adjusted net income = 28700+32000*(1-0.3)= 51100 Return on total assets = Adjusted net income/Average total assets = 51100/231000= 22.12%

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