Answer:
d. $85,748
Explanation:
For computing the net income we have to do the following calculations
Debt equity ratio = (Total debt ÷ Shareholders’ Equity)
0.94 = (Total debt ÷ $520,000)
So, the total debt = $520,000 × 0.94 = $488,800
And, the total assets would be equal to
= Total debt + total equity
= $488,800 + $520,000
= $1,008,800
Return on assets = (Net income) ÷ (total assets)
8.5% = Net income ÷ $1,008,800
Hence, net income = $85,748
