The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows. Also, assume a tax rate of 37%.

Line Item DescriptionAmount Percent Net sales$8,281,989100.0%Less: Cost of goods sold5,383,29365.0 Gross margin$2,898,69635.0 Less: Operating expenses1,323,36816.0 Operating income$1,575,32819.0 Less: Interest expense50,0000.6 Income before taxes$1,525,32818.4 Less: Income taxes (37%)*564,3716.8 Net income$960,95711.6

* Includes both state and federal taxes.

Line Item DescriptionAmountBalance, beginning of period$1,979,155Net income960,957 Total$2,940,112Preferred dividends80,000Dividends to common stockholders201,887 Balance, end of period$2,658,225

Line Item Description20X1 20X2 Assets Current assets: Cash$2,875,000$2,580,000 Marketable securities800,000700,000 Accounts receivable (net)939,776690,000 Inventories490,000260,000 Other93,00074,261 Total current assets$5,197,776$4,304,261Property and equipment: Land$1,575,000$1,067,315 Building and equipment (net)1,348,8001,150,000 Total long-term assets$2,923,800$2,217,315Total assets$8,121,576$6,521,576Liabilities and stockholders' equity Current liabilities: Notes payable, short term$1,170,127$ 543,641 Accounts payable252,724101,500 Current maturity of long-term debt3,0002,000 Accrued payables200,00057,780 Total current liabilities$1,625,851$ 704,921Long-term liabilities: Bonds payable, 10%500,000500,000 Total liabilities$2,125,851$1,204,921Stockholders' equity: Preferred stock, $25 par, 8%$1,000,000$1,000,000 Common stock, $1.50 par337,500337,500 Additional paid-in capital*2,000,0002,000,000 Retained earnings2,658,2251,979,155 Total stockholders' equity$5,995,725$5,316,655Total liabilities and stockholders' equity$8,121,576$6,521,576

* For common stock only.

Required:

Note: Round the return on total assets to two decimal places.

1. Calculate the average total assets = $_____

2. Calculate the return on total assets = ----%