Answer:
Sand Sportswear's net income for the year is $115,000
Explanation:
In order to calculate the net income for the year we would have to us the following formula:
Return on equity = Net income / Average total equity
Return on equity=20%
Average total equity=($500,000 + $650,000) / 2 = $575,000
Therefore, Net income=Average total equity*Return on equity
Net income=$575,000*20%
Net income=$115,000
Sand Sportswear's net income for the year is $115,000
