The following selected financial data was taken from Admiral Nelson Company’s year end December 31, 2014 financial statements: net sales equaled $110 million; cost of goods sold equaled $60 million; net income equaled $22 million; accounts receivable turnover equaled 7.2; inventory turnover equaled 5.2; asset turnover equaled 0.515; and the equity multiplier was 2.36 for the year. Admiral Nelson’s return on equity for 2014 is:A) 22.0%B) 24.3%C) 17.4%D) 9.0%The Richard’s Red Company maintains a checking account at the Bank of the North. The bank statement for the month of October 2014 indicated the following: balance on October 1, 2014 was $32,690, deposits for October totaled $86,000, checks paid in October totaled $75,200, service charges for October totaled $350; October NSF checks totaled $1,600; a monthly loan payment deducted by the bank directly from the company’s bank account totaled $3,400; and the ending balance on October 31, 2014 totaled $38,140. At the end of October 2014, Richard’s accounting records indicated a balance in its checking account of $42,544. Deposits in transit were $4,224 and outstanding checks totaled $5,620. In addition, a check for $500 to purchase office furniture was incorrectly recorded by the company as a $50 disbursement. The bank correctly processed the check during October. Assuming the company has no other cash, the amount Richard’s Red would report for cash as a current asset on its October 31, 2014 balance sheet is:A) $38,140B) $42,544C) $36,744D) $41,148
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