Calculate Return on Equity from the Following Information: Sales =

question 21

Multiple Choice

Calculate return on equity from the following information: Sales = $400,000
Expenses = $100,000
Debts incurred = $120,000
Owner's equity = $180,000

• A) 2:3
• B) 3:2
• C) 5:3
• D) 4:5
• E) 5:1

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Definitions:

Partnership

A formally established way of running a business by two or more participants who equally handle the administration and profit-sharing.

Amount Debited

The total sum that has been recorded on the debit side of a company's accounts, reflecting an increase in assets or expenses, or a decrease in liabilities or equity.

Goodwill Method

The goodwill method involves assigning a value to the intangible benefits or assets of a company, like brand reputation, during an acquisition or merger.

Capital Balances

The amount of money that owners have invested in an entity, plus any retained earnings or subtracted losses.