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NEW QUESTION: 1
The following data pertain to Cowl, Inc., for the year ended December 31, 20X4:
What was Cowl's rate of return on assets for 20X4?
Choice "b" is correct. Rate of return on assets is defined as the net income divided by the average total
assets. In this case:
$150,000 / [($2,000,000 + $3,000,000)/2] or [$150,000 / $2,500,000] = 6% rate of return.
Choice "a" is incorrect. Average total assets ($2,500,000) should be used, not ending assets
Choice "c" is incorrect. Net income ($150,000) and average total assets ($2,500,000) should be used, not
net sales ($600,000) and ending assets ($3,000,000).
Choice "d" is incorrect. Net income ($150,000) should be used, not net sales ($600,000).
NEW QUESTION: 2
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