1. Please show me how to work this problem
1. Return on equity for Pets Inc. for 2008 and 2007 is:
a.  13.34%, 11.30%
b.  14.34%, 4.3%
c.  13.34%, 4.3%
d.  Cannot determine from information given
Answer should be B
Solution
Ans
Calculation of Equity
Details 2008 2007 2006
Additional Paid in capital 40,000.00 40,000.00 40,000.00
Additional Paid in capital-Treasury Stock 4,000.00
Common Stock 2,00,000.00 2,00,000.00 2,00,000.00
Retained Earnings 98,104.00 90,600.00 1,16,000.00
Less:Treasury Stock -10,000.00
Total 3,42,104.00 3,20,600.00 3,56,000.00
Average Equity 3,31,352.00 3,38,300.00
Net Income available for Equity Share holders 47,504.00 14,600.00
Return on Equity 14.34% 4.3%