The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and

Question:

The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments ……………………. $ 40,000
Accounts receivable (net) ………………………......……... 25,000
Inventory……………………………………………..............….. 20,000
Property, plant and equipment ……………………….. 210,000
Total Assets ……………………………………...........……. $295,000

Liabilities and Stockholders Equity

Current liabilities …………………………………............…... 60,000
Long-term liabilities ……………………………...........……. 85,000
Stockholders equity-common ……………………........ 150,000
Total Liabilities and stockholders equity ………... $295,000

Income Statement

Sales ………………………………………........……… $ 85,000

Cost of goods sold ……………………………..……. 45,000
Gross margin ….…………………………….………… 40,000
Operating expenses ……………………..……...… 20,000
Net income ………………………………..…..…..… $ 20,000

Number of shares of common stock ………….…… 6,000000
Market price of common stock …………………..........…… $20

Dividends per share ……………………………….............…… 0.90

Cash provided by operations ……………........…..….. $30,000

What is the rate earned on total assets For this company? Round you answer to one decimal point.

A) 10.3%

B) 6.8%

C) 13.3%

D) 8.5%

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...