Answer:
The correct answer is D that is $50,000
Explanation:
The net income is computed as:
Return on Assets = Net Income / Average Total assets
where
Return on assets is 10%
Average Total assets = Beginning total assets + Ending total assets / 2
= ($450,000 + $550,000) / 2
= $1,000,000 / 2
= $500,000
Putting the values in the above formula:
10% = Net Income / $500,000
Net Income = 0.1 × $500,000
Net Income = $50,000
