1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue Operating expenses Income from operations 2. Using the DuPont formula for rate of return on investment, compute the profit margin, investment turnover, and rate of return on investment for each division. Round your answe to one decimal place. Division Profit Margin Investment Turnover ROI Mutual Fund Division % Electronic Brokerage Division % % Investment Banking Division % % 3. When faced with limited funds for expansion, management should consider an expansion of the Division first.
Q: Davis Corporation reported the following financial data for one of its divisions for the year;…
A: Sales is the amount of goods or inventory sold during that period. Income is the earning or amount…
Q: Nantor Corporation has two divisions, Southern and Northern. The following information was taken…
A: Fixed cost is the cost that has been fixed at all levels of output. Whereas, variable cost is the…
Q: In divisional income statements prepared for Iguana Construction Company, the Payroll Department…
A: >Cost allocation based on Activity Based Costing--Under this method, the total cost is grouped…
Q: he vice president of operations of Pavone Company is evaluating the performance of wo divisions…
A: The income statement is prepared to find the net income or loss incurred during the period.
Q: Holo Company reported the following financial numbers for one of its divisions for the year; averag
A: Division return on investment = Net profit / Average total assets Net Profit = sales - cost of goods…
Q: The following data relate to the Western Division of Palmerston Ltd for the current year. Sales…
A: Note:- Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: Profit center responsibility reporting for a service company Red Line Railroad Inc. has three…
A: Income statement forms a part of financial statements and is prepared with a view to show the total…
Q: Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W)…
A:
Q: 2. Using the DuPont formula for return on investment, determine the profit margin, investment…
A: Business Division Consumer Division (2.) Average Invested Assets $3,42,40,000…
Q: n divisional income statements prepared for Demopolis Company, the Payroll Department costs are…
A: Total Weekly payroll (residential)=Number of weeks×Weekly payroll=125×52=6500
Q: Effect of Proposals on Divisional Performance A condensed income statement for the Electronics…
A: Hi student Since there are multiple subparts, we will answer only first three subparts.
Q: 1. Prepare condensed divisional income statements for the year ended December 31, 20Y7, assuming…
A: The equation for the basic DuPont model is Net profit margin X Total asset turnover X Equity…
Q: a. Determine the missing items. Round rate of return on investment, profit margin, and investment…
A: Formulas for the above table:
Q: need help with last question Effect of Proposals on Divisional Performance A condensed income…
A: Ratio analysis: It is an analysis to measure a company's liquidity, operational efficiency, and…
Q: Effect of Proposals on Divisional Performance A condensed income statement for the Electronics…
A: Hardware Division Benefit Margin 12 % Venture Turnover 1.2 ROI 14.4 % Net revenue = Income…
Q: The sales, operating income, and invested assets for each division of Garner Company are as follows:…
A: Ratios are helpful in decision making, It is also helpful to compare two or more financial…
Q: Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z…
A: Ratio analysis means where different ratio of various years of years companies has been compared and…
Q: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the…
A: In the case of department accounting, service charges are allocated to each department using a…
Q: Far Sight is a division of a major corporation. The following data are for the latest year of…
A: Return on investment represents the profit earned on an investment made. It is calculated by…
Q: Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified…
A: Formulas:
Q: Consumer Commercial Revenues $7,430,000 $6,184,000 Cost of goods sold 4,123,000 3,125,000…
A: Income statement: The financial statement which reports revenues and expenses from business…
Q: . Using the DuPont formula for return on investment, determine the profit margin, investment…
A: The first question is answered for you. Please resubmit specifying the question number you want…
Q: Conico Railroad Inc. has three regional divisions organized as profit centers. The chief executive…
A: Customer support = Total Expenses * East Contracts/Total No. of Contracts Profit margin =…
Q: The following data were summarized from the accounting records for Ruiz Industries Inc. for the year…
A: Preparation of the divisional income statements for Ruiz Industries Inc. :
Q: The sales, income from operations, and invested assets for each division of Grosbeak Company are as…
A: SOLUTION- RATIO ANALYSIS- IT IS A QUANTITATIVE METHOD OF GAINING INSIGHT IN TO COMPANYS…
Q: Divisional Income Statements The following data were summarized from the accounting records for…
A: The amounts are given on the basis of the type of cost. We need to categorize it on the basis of…
Q: Fashion Forward, Inc. is decentralized into two divisions which are investment centers: Men’s Wear…
A: Preparation of divisional income statement for the Men’s Wear: Fashion Forward Inc.…
Q: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were…
A: Income statement: The financial statement which reports revenues and expenses from business…
Q: In divisional income statements prepared for LeFevre Company, the Payroll Department costs are…
A: Here, payroll department costs will be allocated on the basis of a total number of payrolls.…
Q: In divisional income statements prepared for Demopolis Company, the Payroll Department costs are…
A: Service department charges are indirect expenses incurred by divisions which are categorized as…
Q: Carry On Freight Inc. has three regional divisions organized as profit centers. The chief executive…
A: Income statement shows all expenses and all incomes of the business and at the end it shows net…
Q: The Emergency Medical Services Company has two divisions that operate independently of one another.…
A: Return on investment is a financial measure used to calculate the income on the investment made in a…
Q: Commercial Retail Division Division Sales 945,000 966,000 Cost of Goods Sold 504,000 559,300 Selling…
A: Formula: Gross profit = Sales - cost of goods sold
Q: 3. In divisional income statements prepared for Demopolis Company, the Payroll Department costs are…
A: requirement 1 Residential Commercial Government Contract Total A number of payroll…
Q: Effect of Proposals on Divisional Performance A condensed income statement for the Electronics…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: The following are the details from the income statements of division S and division C for the year…
A: Formula for EVA EVA = NOPAT - WACC x Capital Invested. First we need to calculate Net Operating…
Q: Service Department Charges In divisional income statements prepared for LeFevre Company, the…
A: The income statement which is prepared to know the financial performance of an operating unit in a…
Q: Divisional Income Statements The following data were summarized from the accounting records for…
A: DIVISIONAL INCOME STATEMENT: It is a summary of the financial performance of an operating unit…
Q: Bentz Co. has two divisions, A and B. Invested assets and condensed income statement data for each…
A: Divisional income statement of the business shows all income and expenses related to that particular…
Q: Effect of Proposals on Divisional Performance A condensed income statement for the Electronics…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…
Q: Dacker Products is a division of a major corporation. The following data are for the most recent…
A: Return on Investment is used to evaluate the profitability of an asset or an investment and the…
Q: A company's division has sales of $2,610,000, income of $991,800, and average assets of $1,800,000.…
A: Solution: Compute the Division's Profit Margin Numerator / Denominator = Profit Margin Income…
Q: In divisional income statements prepared for Demopolis Company, the Payroll Department costs are…
A: Working notes: 1. Residential Commercial Government Grant Number of Payroll checks…
Q: The vice president of operations of Recycling Industries is evaluating the performance of two…
A: Solution 1: Condensed Divisional Income Statement Particulars Business Consumer Particulars…
How would I figure this out?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Effect of Industry Characteristics on Financial Statement Relations. Effective financial statement analysis requires an understanding of a firms economic characteristics. The relations between various financial statement items provide evidence of many of these economic characteristics. Exhibit 1.23 (pages 6263) presents common-size condensed balance sheets and income statements for 12 firms in different industries. These common-size balance sheets and income statements express various items as a percentage of operating revenues. (That is, the statement divides all amounts by operating revenues for the year.) Exhibit 1.23 also shows the ratio of cash flow from operations to capital expenditures. A dash for a particular financial statement item does not necessarily mean the amount is zero. It merely indicates that the amount is not sufficiently large for the firm to disclose it. A list of the 12 companies and a brief description of their activities follow. A. Abercrombie Fitch: Sells retail apparel primarily through stores to the fashionconscious young adult and has established itself as a trendy, popular player in the specialty retailing apparel industry. B. Allstate Insurance: Sells property and casualty insurance, primarily on buildings and automobiles. Operating revenues include insurance premiums from customers and revenues earned from investments made with cash received from customers before Allstate pays customers claims. Operating expenses include amounts actually paid or expected to be paid in the future on insurance coverage outstanding during the year. C. Best Buy: Operates a chain of retail stores selling consumer electronic and entertainment equipment at competitively low prices. D. E. I. du Pont de Nemours: Manufactures chemical and electronics products. E. Hewlett-Packard: Develops, manufactures, and sells computer hardware. The firm outsources manufacturing of many of its computer components. F. HSBC Finance: Lends money to consumers for periods ranging from several months to several years. Operating expenses include provisions for estimated uncollectible loans (bad debts expense). G. Kelly Services: Provides temporary office services to businesses and other firms. Operating revenues represent amounts billed to customers for temporary help services, and operating expenses include amounts paid to the temporary help employees of Kelly. H. McDonalds: Operates fast-food restaurants worldwide. A large percentage of McDonalds restaurants are owned and operated by franchisees. McDonalds frequently owns the restaurant buildings of franchisees and leases them to franchisees under long-term leases. I. Merck: A leading research-driven pharmaceutical products and services company. Merck discovers, develops, manufactures, and markets a broad range of products to improve human and animal health directly and through its joint ventures. J. Omnicom Group: Creates advertising copy for clients and is the largest marketing services firm in the world. Omnicom purchases advertising time and space from various media and sells it to clients. Operating revenues represent commissions and fees earned by creating advertising copy and selling media time and space. Operating expenses includes employee compensation. K. Pacific Gas Electric: Generates and sells power to customers in the western United States. L. Procter Gamble: Manufactures and markets a broad line of branded consumer products. REQUIRED Use the ratios to match the companies in Exhibit 1.23 with the firms listed above.Effect of Industry Characteristics on Financial Statement Relations: A Global Perspective. Effective financial statement analysis requires an understanding of a firms economic characteristics. The relations between various financial statement items provide evidence of many of these economic characteristics. Exhibit 1.24 (pages 6667) presents common-size condensed balance sheets and income statements for 12 firms in different industries. These common-size balance sheets and income statements express various items as a percentage of operating revenues. (That is, the statement divides all amounts by operating revenues for the year.) A dash for a particular financial statement item does not necessarily mean the amount is zero. It merely indicates that the amount is not sufficiently large for the firm to disclose it. A list of the 12 companies, the country of their headquarters, and a brief description of their activities follow. A. Accor (France): Worlds largest hotel group, operating hotels under the names of Sofitel, Novotel, Motel 6, and others. Accor has grown in recent years by acquiring established hotel chains. B. Carrefour (France): Operates grocery supermarkets and hypermarkets in Europe, Latin America, and Asia. C. Deutsche Telekom (Germany): Europes largest provider of wired and wireless telecommunication services. The telecommunications industry has experienced increased deregulation in recent years. D. E.ON AG (Germany): One of the major public utility companies in Europe and the worlds largest privately owned energy service provider. E. Fortis (Netherlands): Offers insurance and banking services. Operating revenues include insurance premiums received, investment income, and interest revenue on loans. Operating expenses include amounts actually paid or amounts it expects to pay in the future on insurance coverage outstanding during the year. F. Interpublic Group (U.S.): Creates advertising copy for clients. Interpublic purchases advertising time and space from various media and sells it to clients. Operating revenues represent the commissions or fees earned for creating advertising copy and selling media time and space. Operating expenses include employee compensation. G. Marks Spencer (U.K.): Operates department stores in England and other retail stores in Europe and the United States. Offers its own credit card for customers purchases. H. Nestl (Switzerland): Worlds largest food processor, offering prepared foods, coffees, milk-based products, and mineral waters. I. Roche Holding (Switzerland): Creates, manufactures, and distributes a wide variety of prescription drugs. J. Sumitomo Metal (Japan): Manufacturer and seller of steel sheets and plates and other construction materials. K. Sun Microsystems (U.S.): Designs, manufactures, and sells workstations and servers used to maintain integrated computer networks. Sun outsources the manufacture of many of its computer components. L. Toyota Motor (Japan): Manufactures automobiles and offers financing services to its customers. REQUIRED Use the ratios to match the companies in Exhibit 1.24 with the firms listed above.Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual FundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee revenue $1,010,000 $1,060,000 $1,030,000 Operating expenses 492,000 390,400 727,600 Invested assets 3,700,000 3,100,000 2,100,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: Question Content Area 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department cost allocations. E.F. Lynch CompanyDivisional Income StatementsFor the Year Ended June 30, 20Y8 MutualFundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee…
- Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual FundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee revenue $1,120,000 $1,160,000 $1,130,000 Operating expenses 603,400 486,800 854,000 Invested assets 4,100,000 3,400,000 2,300,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 MutualFundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee revenue $fill in…Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue $630,000 $650,000 $640,000 Operating expenses 340,200 308,000 484,000 Invested assets 2,300,000 1,900,000 1,300,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue $fill in…Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual FundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee revenue $1,090,000 $1,160,000 $1,080,000 Operating expenses 530,000 486,800 763,200 Invested assets 4,000,000 3,400,000 2,200,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 MutualFundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee revenue $ $ $…
- Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue $1,500,000 1,570,000 1,530,000 Operating expenses 807,000 742000 1,158,000 Invested assets 5,500,000 4600000 3,100,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue…Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as A decentralized unit in which the manager has the responsibility and authority to make decisions that affect not only costs and revenues but also the fixed assets invested in the center.investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual FundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee revenue $1,310,000 $1,370,000 $1,330,000 Operating expenses 705,200 578,000 1,006,000 Invested assets 4,800,000 4,000,000 2,700,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.…E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual FundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee revenue $1,360,000 $1,440,000 $1,330,000 Operating expenses 660,000 608,400 941,200 Invested assets 5,000,000 4,200,000 2,700,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: Question Content Area 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch CompanyDivisional Income StatementsFor the Year Ended June 30, 20Y8 MutualFundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee revenue Operating expenses Operating income…
- Divisional Income Statements with Service Department Charges Yozamba Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Support Department $1,072,800 Purchasing Department 244,500 Other corporate administrative expenses 566,000 Total corporate expense $1,883,300 The other corporate administrative expenses include officers’ salaries and other expenses required by the corporation. The Tech Support Department charges the divisions for services rendered, based on the number of computers in the department, and the Purchasing Department charges divisions for services, based on the number of purchase orders for each department. The usage of service by the two divisions is as follows: Tech Support Purchasing Consumer Division 440 computers 5,700 purchase orders Commercial Division 280 10,600 Total 720 computers…Divisional Income Statements with Service Department Charges Yozamba Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Support Department $516,000 Purchasing Department 89,600 Other corporate administrative expenses 560,000 Total corporate expense $1,165,600 The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Support Department charges the divisions for services rendered, based on the number of computers in the department, and the Purchasing Department charges divisions for services, based on the number of purchase orders for each department. The usage of service by the two divisions is as follows: Tech Support Purchasing Consumer Division 375 computers 1,960 purchase orders Commercial Division 225 3,640 Total 600 computers…Divisional Income Statements with Service Department Charges Yozamba Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Support Department $912,600 Purchasing Department 265,500 Other corporate administrative expenses 507,000 Total corporate expense $1,685,100 The other corporate administrative expenses include officers’ salaries and other expenses required by the corporation. The Tech Support Department charges the divisions for services rendered, based on the number of computers in the department, and the Purchasing Department charges divisions for services, based on the number of purchase orders for each department. The usage of service by the two divisions is as follows: Tech Support Purchasing Consumer Division 480 computers 6,200 purchase orders Commercial Division 300 11,500 Total 780 computers…