Question

The balance sheet of Pacific Ocean Resort reports total assets of $720,000 and $870,000 at the beginning and end of the year,

Answer 1

Based on the return on assets of 21%, the net income of Pacific Ocean Resort  for year is $166,950

What is return on assets?

The return on assets for the company is determined as the net income divided by the average total assets of Pacific Ocean Resort , bearing in mind that the average total assets is sum of the beginning and ending assets divided by 2

return on assets=net income/average total assets

return on assets=21%

net income=unknown

average total assets=($720,000+$870,000)/2

average total assets=$795,000

21%=net income/$795,000

net income=$795,000*21%

net income=$166,950

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