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r-ruslan [8.4K]
3 years ago
12

The balance sheet of Sub America reports total assets of $400,000 and $450,000 at the beginning and end of the year, respectivel

y. The return on assets for the year is 10%. What is Sub America's net income for the year?
Business
1 answer:
Rudiy273 years ago
6 0

Answer:

$42,500

Explanation:

Given that,

Beginning total assets = $400,000

Ending total assets = $450,000

Average total assets = (Beginning total assets + Ending total assets) ÷ 2

                                   = ($400,000 + $450,000) ÷ 2

                                   = $425,000

Return on assets = 10%

Net Income ÷ Average total assets = 0.1

Net Income ÷ $425,000 = 0.1

Net Income = 0.1 × $425,000

                   = $42,500

Therefore, the Sub America's net income for the year is $42,500.

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