In 2011, Osasco Corporation had net sales of R$600,000 and cost or goods sold of R$360,000. Operating expenses were R$153,000, and interest expense was R$7,500. The corporation’s tax rate is 30%. The corporation declared preference dividends of R$15,000 in 2011, and its average ordinary shareholders’ equity during the year was R$200,000.

Instructions

(a) Prepare an income statement for Osasco Corporation.

(b) Compute Osasco Corporation’s return on ordinary shareholders’ equity for 2011.