Question

Dawson Electronic Services had revenues of 112,000 and expenses of 66,000 for the year. Its assets at the beginning of the year were 416,000. At the end of the year assets were worth 466,000. Calculate its return on assets.

Answer 1

The return on assets for Dawson Electronic Services is approximately 10.42%.

Step-by-step explanation:

The return on assets (ROA) is calculated by dividing the net income by the average total assets.

First, let's find the net income:

Net Income = Revenues - Expenses

Net Income = 112,000 - 66,000

Net Income = 46,000

Next, let's find the average total assets:

Average Total Assets = (Beginning Assets + Ending Assets) / 2

Average Total Assets = (416,000 + 466,000) / 2

Average Total Assets = 882,000 / 2

Average Total Assets = 441,000

Now, let's calculate the return on assets (ROA):

ROA = Net Income / Average Total Assets

ROA = 46,000 / 441,000

ROA ≈ 0.1042 or 10.42%

Therefore, the return on assets (ROA) for Dawson Electronic Services is approximately 10.42%.