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The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. The return on assets for the year is 10%. What is Hidden Valley's net income for the year?

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tanseershar

Answer:

$50,000

Explanation:

Total Assets  at beginning                          $450,000

Total Assets at end                                    $550,000

Total Assets                                                $1,000,000

Average Total Assets=Total Assets/2=$1,000,000/2=$500,000

Return on assets=Net Income/Average Total Assets

10%=Net Income/$500,000

Net Income=$500,000*10%

Net Income=$50,000

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