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 $188,000 78,000 110,000 51,000 59,000 26,000 33,000 9,900 $ 23,100 The beginning balance of total assets was $218,000 and the ending balance was $238,000 Required Compute the return on total assets. (Round your "Percentage" answer to 2 decimal places.) Return on total assets

Explanation / Answer

Return on total Assets = Net operating Income/Average Total Assets Net operting Income = $59,000 Average Total Assets = ($ 218,000+238,000)/2 = $228,000 Return on total Assets = $59,000/$228,000 = 25.88%

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