Bryant, Inc. provides the following data:2017 2016Cash $47,000 $25,000Accounts Receivable, Net 100,000 62,000Merchandise Inventory 75,000 50,000Property, Plant, and Equipment, Net 182,000 120,000Total Assets $404,000 $257,000Additional information:Net Credit Sales $530,000Cost of Goods Sold 170,000Interest Expense 20,000Net Income 185,000Calculate the rate of return on total assets for 2017. (Round your answer to two decimal places.)

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andromache andromache · Answer 1 · 2019-10-01T12:14:15+02:00

Answer:

The rate of return on total assets for 2017 is 62.03%

Explanation:

The return on total shows assets shows a relationship between the net income including interest expenses and the average total assets.

The computation of the rate of return on the total assets is shown below:

Rate of return on the total assets = {(Net income + Interest expense) ÷ average total assets)} × 100

= ($185,000 + $20,000) ÷ {($404,000 + $257000) ÷ 2} × 100

= ($205,000 ÷ $330,500) × 100

= 62.03%