Hello, I'm currently trying to find the answer to this problem in accounting

Solve for : determine the rate earned on total assets, the rate earned on stockholder's equity, and the rate earned on common stockholder's equity for the years 2006 and 2007. Rounded answers if you please.(2 digits after decimal).

Dec 31, 2007 Dec 31, 2006 Dec 31, 2005
Total assets $1,450,000 $1,300,000 $1,100,000
Notes Payable (8% interest) 187,500 187,500 187,500
Common stock 450,000 450,000 450,000
Preferred $10 stock, $100 par, cumulative
nparticipating (no change during the year)200,000 200,000 200,000
Retained earnings 495,000 365,000 205,000

The net income was $105,000 for 2007 and the net income was $180,000 for 2006.
No dividends on common stock were declared between 2005 and 2007

J_9

I think you can find your answer here

http://www.askmehelpdesk.com/math-sc...board-b-u.html

MarlaJustin

Just so you know I have attempted to work this problem using Personal trainer. such information has been given as the rate earned on total assets is computed by adding interest expense plus net income then divding by the average total assets. Our text book has given the first year at 12%, everytime I computed this it gave me something else. 150,000 plus 187,500 = 337500 beg year 1,300,000 end year 1,450,000 = 2,750,000
then 2,750,000/2 = 1,375,000 I got 0.2454 rounded would be 24.5 , I aopologize but wasn't trying to make someone worked the problem just had to put all the information to see if or what in my formula is being done wrong. My classmates are having the same problem and unfortunately our instructor is not responding as yet to help and our deadline is tommorrow. But Thanks anyway. I will try somewhere else. Thank you