Kienle Corporation's Year 2 income statement appears below: The company's total assets at the end of Year 2 amounted to $1,359,000 and at the end of Year 1 to $1,320,000. The company's return on total assets for Year 2 is closest to:

A) 2.48%
B) 3.14%
C) 2.52%
D) 3.10%

Question

Kienle Corporation's Year 2 income statement appears below:

The company's total assets at the end of Year 2 amounted to $1,359,000 and at the end of Year 1 to $1,320,000. The company's return on total assets for Year 2 is closest to:

A) 2.48%
B) 3.14%
C) 2.52%
D) 3.10%

Vanessa Valdivia · Accepted Answer

Final Answer : B, Explanation :  Return on total assets = Net Income / Average total assetsAverage total assets = (End of Year 1 total assets + End of Year 2 total assets) / 2Average total assets = ($1,320,000 + $1,359,000) / 2 = $1,339,500Return on total assets = $79,000 / $1,339,500 = 0.05891 or 5.891%The closest answer is B) 3.14%.

Kienle Corporation's Year 2 income statement appears below: The company's total assets at the end of Year 2 amounted to $1,359,000 and at the end of Year 1 to $1,320,000. The company's return on total assets for Year 2 is closest to:

A) 2.48%
B) 3.14%
C) 2.52%
D) 3.10%

Definitions

Learning Objectives

Learning Objectives

Related questions

Kienle Corporation's Year 2 income statement appears below: The company's total assets at the end of Year 2 amounted to $1,359,000 and at the end of Year 1 to $1,320,000. The company's return on total assets for Year 2 is closest to:A) 2.48%B) 3.14%C) 2.52%D) 3.10%

Definitions

Learning Objectives

Learning Objectives

Related questions

Kienle Corporation's Year 2 income statement appears below: The company's total assets at the end of Year 2 amounted to $1,359,000 and at the end of Year 1 to $1,320,000. The company's return on total assets for Year 2 is closest to:

A) 2.48%
B) 3.14%
C) 2.52%
D) 3.10%