Microsoft Corporation Income Statement for the Year Ended December 31, Year 4

• Sales revenue: $300,000
• Cost of goods sold: $180,000
• Gross margin: $120,000
• Operating expenses:
  • Selling expenses: $20,000
  • Depreciation expenses: $25,000
• Operating income: $75,000
• Nonoperating items: $10,000
• Net income: $65,000

Balance Sheet as of December 31, Year 4

• Assets:
  • Cash: $25,000
  • Accounts receivable: $50,000
  • Merchandise inventory: $45,000
  • Equipment (less accumulated depreciation): $60,000
  • Nonoperating assets: $20,000
• Total assets: $200,000
• Liabilities:
  • Accounts payable: $15,000
  • Notes payable: $10,000
  • Stockholders' equity: $175,000
• Total liabilities and stockholders' equity: $200,000

Required:

a. Calculate the gross margin percentage. b. Calculate the operating margin percentage. c. Calculate the return on assets (ROA). d. Calculate the return on equity (ROE). e. Assume Microsoft Corporation decides to distribute $30,000 of its cash as dividends. Calculate the new return on equity (ROE) after the dividend distribution.