Answer:
The return on total assets is 6.19%
Explanation:
According to accounting equation
Total Asset = Equity + Liabilities
Total Assets, beginning-year = Total stockholders' equity, beginning-year + Total liabilities, beginning-year
Total Assets, beginning-year = $204,935 + $89,932
Total Assets, beginning-year = $294,867
Total Assets, end-of-year = Total stockholders' equity, end-of-year + Total liabilities, end-of-year
Total Assets, end-of-year = $130,851 + $109,201 = $240,052
Average total assets = ( Total Assets, beginning-year + Total Assets, end-of-year ) / 2
Average total assets = ( $294,867 + $240,052 ) / 2 = $267,459.5
Return on total Assets = Net Income / Average total Assets
Return on total Assets = $16,553 / $267,459.5 = 0.0619 = 6.19%
