Refer to the information for Juroe Company below. Also, assume that Juroe's total assets at the beginning of last year equaled $17,350,000 and that the tax rate applicable to Juroe is 40 percent.
Information for Juroe Company
Juroe Company provided the following income statement for last year:
Sales................................................... $11,300,000
Cost of goods sold..................................... 3,000,000
Gross margin....................................... $ 8,300,000
Operating expenses..................................... 3,800,000
Operating income....................................$ 4,500,000
Interest expense......................................... 1,000,000
Income before taxes................................$ 3,500,000
Income taxes............................................ 1,400,000
Net income.......................................... $ 2,100,000
Juroe's balance sheet as of December 31 last year showed total liabilities of $10,250,000, total equity of $6,150,000, and total assets of $16,400,000.
Required:
Round answers to two decimal places.
1. Calculate the average total assets.
2. Calculate the return on assets.