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14 November, 03:40

Dawson Electronic Services had revenues of $88,000 and expenses of $54,000 for the year. Its assets at the beginning of the year were $404,000. At the end of the year assets were worth $454,000. Calculate its return on assets.

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  1. 14 November, 03:53
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    0.07925 or 7.925%

    Explanation:

    Given that,

    Revenues = $88,000

    Expenses = $54,000

    Assets at the beginning of the year = $404,000

    End of the year assets = $454,000

    Net income:

    = Revenues - Expenses

    = $88,000 - $54,000

    = $34,000

    Average total assets:

    = (Assets at the beginning + End of the year assets) : 2

    = ($404,000 + $454,000) : 2

    = $429,000

    Return on assets:

    = Net income : Average total assets

    = $34,000 : $429,000

    = 0.07925 or 7.925%
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