Business
Engineering
Math
Science
Social ScienceThe operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating incomeInvested AssetsRetail Division$123,900 $590,000 Commercial Division182,400 760,000 Internet Division137,800 530,000 Assume that management has established a 12% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail DivisionCommercial DivisionInternet DivisionOperating income$123,900 $182,400 $137,800 Minimum acceptable operating income as a percent of invested assets Residual income$ $ $ b. Which division has the most residual income?
The operating income and the amount of invested assets in each division of Conley Industries are as follows:
| Operating income | Invested Assets | |||
| Retail Division | $123,900 | $590,000 | ||
| Commercial Division | 182,400 | 760,000 | ||
| Internet Division | 137,800 | 530,000 |
Assume that management has established a 12% minimum acceptable return for invested assets.
a. Determine the residual income for each division.
| Retail Division | Commercial Division | Internet Division | ||||
| Operating income | $123,900 | $182,400 | $137,800 | |||
| Minimum acceptable operating income as a percent of invested assets | ||||||
| Residual income | $ | $ | $ |
b. Which division has the most residual income?
Expert Answer
Image Transcriptionclose
Retail Division Division $123,900 Commercial Internet Division $182,400 $137,800 (a) Operating income (x) Minimum acceptable return y) Assets invested x12% Residual income = (x) - (y) S91,200 $63,600 74.200 $70.800 53.100 91,200
Business
Accounting
Related Accounting Q&A
Find answers to questions asked by student like you
Show more Q&A addQ: What are the differences between Notes Payable and Accounts Payable?
A: Explain the difference between a note payable and an account payable as follows:Notes payable: A not...
Q: Distinguish between cash basis and accrual basis of account.
A: Accounting: Accounting is an art of recording, classifying, analyzing and summarizing the financial ...
Q: P 2-3 Computations for investee when excess allocated to inventories, building, and goodwill Pop ...
A: Income from Son for 2016 is $22,800.
Q: "Single Entry system of book keeping is the most incomplete, inaccurate, unscientific and unsystemat...
A: Single entry system of book keeping: In this single entry system of book keeping only the cash books...
Q: Differentiate between the accrual method and cash method?
A: The Cash Method: Revenue is reported on the income statement only when cash is received. Expenses ar...
Q: Define sacrificing ratio.
A: Definition of Sacrificing Ratio:Sacrificing ratio is the ratio where the old partner give their cons...
Q: Parrish 2-8 Pg. 38 Please put the following transactions in a T-Account format and find the missing...
A: Account receivable: The amount of money to be received by a company for the sale of goods and servic...
Q: Compute depreciation under alternative methods Equipment costing $130,000 is expected to have a resi...
A: a.
Q: Accounting Question
A: Statement of cash flows: This statement reports all the cash transactions which are responsible for ...
