Testbank Multiple Choice Question 63

Information for Crane Company is given below:

Crane Company
Balance Sheet
December 31, 2021
Assets					Equities
Cash			$ 302000		Accounts payable				$ 625000
Accounts receivable (net)			1955000		Income taxes payable				193000
Inventories			2436000		Miscellaneous accrued payables				227000
Plant and equipment,					Bonds payable (8%, due 2023)				1900000
	net of depreciation		1983000		Preferred stock ($100 par, 6%
Patents			262000			cumulative nonparticipating)			700000
Other intangible assets			75000		Common stock (no par, 60,000
		Total Assets	$7013000			shares authorized, issued
						and outstanding)			1127000
					Retained earnings				2464000
					Treasury stock-1500 shares
						of preferred			(223000)
							Total Equities		$7013000
Crane Company
Income Statement
Year Ended December 31, 2021
		Net sales						$9300000
		Cost of goods sold						6100000
		Gross profit						3200000
		Operating expenses (including bond interest expense)						1600000
		Income before income taxes						1600000
		Income tax						460000
		Net income						$ 1140000

Additional information: There are no preferred dividends in arrears, the balances in the Accounts Receivable and Inventory accounts are unchanged from January 1, 2021, and there were no changes in the Bonds Payable, Preferred Stock, or Common Stock accounts during 2021. Assume that preferred dividends for the current year have not been declared. The rate of return for 2021 based on the year-end common stockholders' equity was