The return on assets of Chou company is 20.82%
What is the return on assets?
The return on assets of Chou company considers the net income of the company as percentage of average total assets in the year, in short, it is determined as the net income divided by the average total assets, whereby average total assets are computed as the average of the beginning of the year assets and ending value of assets.
return on assets=net income/average total assets
net income=$61,000
average total assets=($268,000+$318,000)/2
average total assets=$293,000
return on assets=$61,000/$293,000
return on assets=20.82%
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