Dawson Electronic Services Had Revenues of $80,000 and Expenses of $50,000

question 142

Multiple Choice

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year.Its assets at the beginning of the year were $400,000.At the end of the year assets were worth $450,000.Calculate its return on assets.

• A)7.1%
• B)7.5%
• C)6.7%
• D)20.0%
• E)18.8%

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Definitions:

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation to each year over the asset's useful life.

Double-Declining-Balance Method

A method of depreciation that provides for a declining periodic depreciation expense over the expected useful life of an asset.

Unamortized Premium

The portion of a bond's premium that has not yet been amortized or reduced over time through periodic charges to income.

Straight-Line Method

A method of calculating depreciation that allocates an equal amount of an asset's cost to each year of its useful life.