Question

In January 2007, the Status Quo Company was formed. Total assets were $593,000, of which $351,000 consisted of depreciable fixed assets. Status Quo uses straight-line depreciation of $35,100 per year, and in 2007 it estimated its fixed assets to have useful lives of 10 years. After tax income has been $43,000 per year for each of the last 10 years. Other assets have not changed since 2007.

a. Compute return on assets at year-end for 2007, 2009, 2012, 2014, and 2016. (Use $43,000 in the numerator for each year.) (Input your answers as a percent rounded to 2 decimal places.)

Answer 1

Ans:

Year	Beginning assets (A)	Depreciation (Note1) (B)	Ending assets C =(A-B)	Average assets D =(A+B)/2	Net Income (E)	Return on assets = Net Income/average assets *100
2007	593000	35100	557900	575450	43000	7.47
2008	557900	35100	522800	540350	43000	7.96
2009	522800	35100	487700	505250	43000	8.51
2010	487700	35100	452600	470150	43000	9.15
2011	452600	35100	417500	435050	43000	9.88
2012	417500	35100	382400	399950	43000	10.75
2013	382400	35100	347300	364850	43000	11.79
2014	347300	35100	312200	329750	43000	13.04
2015	312200	35100	277100	294650	43000	14.59
2016	277100	35100	242000	259550	43000	16.57

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