Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were
The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the question that follow.
Assets | ||
Cash and short-term investments | $ 30,000 | |
Accounts receivable (net) | 20,000 | |
Inventory | 15,000 | |
Property, plant, and equipment | 185,000 | |
Total assets | $250,000 |
Liabilities and Stockholders' Equity | |||
Current liabilities | $ 45,000 | ||
Long-term liabilities | 70,000 | ||
Stockholders' equityCommon | 135,000 | ||
Total liabilities and stockholders' equity | $250,000 |
Income Statement | ||
Sales | $85,000 | |
Cost of goods sold | 45,000 | |
Gross margin | $40,000 | |
Operating expenses | (15,000) | |
Interest expenses | (5,000) | |
Net income | $20,000 |
Number of shares of common stock outstanding | 6,000 |
Market price of common stock | $20 |
Total dividends paid | $9,000 |
Cash provided by operations | $30,000 |
Using the data provided for Diane Company, what is the return on total assets?
a.0.1%
b.8%
c.10%
d.1%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started