The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 20,000 Accounts receivable, net 170,000 Merchandise inventory 370,000 Prepaid expenses 8,000 Total current assets 568,000 Property and equipment, net 890,000 Total assets $ 1,458,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 260,000 Bonds payable, 9% 340,000 Total liabilities 600,000 Stockholders equity: Common stock, $5 par value $ 180,000 Retained earnings 678,000 Total stockholders equity 858,000 Total liabilities and stockholders' equity $ 1,458,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $ 2,240,000 Cost of goods sold 1,190,000 Gross margin 1,050,000 Selling and administrative expenses 640,000 Net operating income 410,000 Interest expense 30,600 Net income before taxes 379,400 Income taxes (30%) 113,820 Net income $ 265,580 Account balances at the beginning of the year were: accounts receivable, $150,000; and inventory, $280,000. All sales were on account. Assets at the beginning of the year totaled $1,000,000, and the stockholders equity totaled $655,000. Required: Compute the following: 1. Gross margin percentage. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 2. Net profit margin percentage. (Round your answer to the nearest whole percentage place (i.e., 0.1234 should be entered as 12%).) 3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
