East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (inthousands):Net incomeInterest expenseFiscal Year 3 Fiscal Year 2 Fiscal Year 1$2,965,307$2,820,657 $2,490,455938,7941,305,728 1,279,872Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for theyear ended April 2, Year 3.a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place.Fiscal Year 3Total assets (at end of fiscal year)Total stockholders' equity (at end of fiscal year)Fiscal Year 2Fiscal Year 3 Fiscal Year 2$83,20012,400$161,6003,300Fiscal Year 3Fiscal Year 2b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place.%olders!%%%the ra

Answer Average total assets for year 3 = (2965307 + 2820657) / 2 = $2892982 Average total assets…

East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (in thousands): Net income Interest expense Fiscal Year 3 Fiscal Year 2 $161,600 3,300 Total assets (at end of fiscal year) Total stockholders' equity (at end of fiscal year) Fiscal Year 3 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the year ended April 2, Year 3. Fiscal Year 2 a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 % $83,200 12,400 % b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 $2,820,657 $2,490,455 $2,965,307 1,305,728 1,279,872 938,794 % % The return on stockholders' equity is greater than ✓ the return on total accots due to the positive ✓ Use of

East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (in thousands): Net income Interest expense Fiscal Year 3 Fiscal Year 2 $161,600 3,300 Total assets (at end of fiscal year) Total stockholders' equity (at end of fiscal year) Fiscal Year 3 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the year ended April 2, Year 3. Fiscal Year 2 a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 % $83,200 12,400 % b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 $2,820,657 $2,490,455 $2,965,307 1,305,728 1,279,872 938,794 % % The return on stockholders' equity is greater than ✓ the return on total accots due to the positive ✓ Use of

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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