ud ACCT 202Routh Summer 2018 online 111 Test Exam Module 6 c

ud ACCT 202-Routh. Summer 2018 (online) 11-1 Test: Exam (Module 6: ch. 12, 14) This Test: 59 p The H End of current year End of prior year $800,000 $504,000 $296,000 S184,000 537,000 $75,000 $71,000 $329,000 $400,000 556,000 Net sales revenue (all credit) Cost of goods sold Gross profit Selling/general expenses Net income Current assets Long-term assets Total assets Current liabilities S20,000 $280,000 $300,000 S16,000 ? A. 4.89% ? B. 15% C. 290796 D. 3968%

Solution

Average Common Stockholders’ Equity = (Beginning Common Stockholders’ Equity + Ending Common Stockholders’ Equity) / 2
Average Common Stockholders’ Equity = ($120,000 + $258,000) / 2
Average Common Stockholders’ Equity = $189,000

Rate of Return on Common Stockholders’ Equity = (Net Income - Dividends) / Average Common Stockholders’ Equity
Rate of Return on Common Stockholders’ Equity = ($75,000 - $0) / $189,000
Rate of Return on Common Stockholders’ Equity = 39.68%