Problem
LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2016 and 2017 2017 2016 Gross sales $ 23,800 $ 18,600 Sales returns and allowances 1,000 100 Net sales $ 22,800 $ 18,500 Cost of merchandise (goods) sold 10,800 7,200 Gross profit $ 12,000 $ 11,300 Operating expenses: Depreciation $ 1,180 $ 840 Selling and administrative 5,800 4,400 Research 1,030 740 Miscellaneous 840 540 Total operating expenses $ 8,850 $ 6,520 Income before interest and taxes $ 3,150 $ 4,780 Interest expense 1,040 740 Income before taxes $ 2,110 $ 4,040 Provision for taxes 844 1,616 Net income $ 1,266 $ 2,424 LOGIC COMPANY Comparative Balance Sheet December 31, 2016 and 2017.
2017 2016
Assets
Current assets: Cash $ 11,100 $ 8,100
Accounts receivable 15,600 11,600
Merchandise inventory 7,600 13,100
Prepaid expenses 23,100 9,100
Total current assets $ 57,400 $ 41,900
Plant and equipment:
Building (net) $ 13,600 $ 10,200
Land 12,600 8,100
Total plant and equipment $ 26,200 $ 18,300
Total assets $ 83,600 $ 60,200
Liabilities Current liabilities:
Accounts payable $ 12,100 $ 6,100
Salaries payable 6,100 4,100
Total current liabilities $ 18,200 $ 10,200
Long-term liabilities:
Mortgage note payable 21,100 19,600
Total liabilities $ 39,300 $ 29,800
Stockholders' Equity Common stock $ 20,100 $ 20,100
Retained earnings 24,200 10,300
Total stockholders' equity $ 44,300 $ 30,400
Total liabilities and stockholders' equity $ 83,600 $ 60,200.
Calculate the return on equity (after tax) ratio.