Bundle: Managerial Accounting, 15th + Cengagenowv2, 1 Term Printed Access Card
15th Edition
ISBN: 9781337955386
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: Cengage Learning
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Question
Chapter 10, Problem 3PB
(1)
To determine
Prepare the income statements for MF, EB, and IB Divisions of Company L for the year ended June 30, 20Y8
(2)
To determine
Ascertain the Profit margin, investment turnover, and return on investment of MF, EB, and IB Divisions
(3)
To determine
Recommend regarding the expansion of the profitable division, based on income from operations and ROI, computed in parts (1) and (2)
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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:
Fee revenue
Operating
expenses
Invested
assets
Required:
Electronic
Investment
Mutual Fund Brokerage
Banking
Division
Division
Division
$1,090,000 $1,130,000 $1,080,000
586,000
4,000,000 3,300,000
The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.
Line Item Description
Fee revenue
Operating expenses
Operating income
Division
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
476,600
Mutual Fund Division
Electronic Brokerage
Division
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1. For…
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 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…
Chapter 10 Solutions
Bundle: Managerial Accounting, 15th + Cengagenowv2, 1 Term Printed Access Card
Ch. 10 - Differentiate between centralized and...Ch. 10 - Differentiate between a profit center and an...Ch. 10 - Prob. 3DQCh. 10 - What is the major shortcoming of using operating...Ch. 10 - In a decentralized company in which the divisions...Ch. 10 - How does using the return on investment facilitate...Ch. 10 - (a) Explain how return on investment might lead a...Ch. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - When using the negotiated price approach to...
Ch. 10 - Budgetary performance for cost center Vinton...Ch. 10 - Support department allocations The centralized...Ch. 10 - Prob. 3BECh. 10 - Profit margin, investment turnover, and ROI Briggs...Ch. 10 - Residual income The Commercial Division of Galena...Ch. 10 - Prob. 6BECh. 10 - Budget performance reports for cost centers...Ch. 10 - The following data were summarized from the...Ch. 10 - For each of the following support departments,...Ch. 10 - Prob. 4ECh. 10 - Service department charges In divisional income...Ch. 10 - Varney Corporation, a manufacturer of electronics...Ch. 10 - Horton Technology has two divisions, Consumer and...Ch. 10 - Rocky Mountain Airlines Inc. has two divisions...Ch. 10 - Championship Sports Inc. operates two divisionsthe...Ch. 10 - Prob. 10ECh. 10 - The operating income and the amount of invested...Ch. 10 - Prob. 12ECh. 10 - The condensed income statement for the Consumer...Ch. 10 - The Walt Disney Company (DIS) has four business...Ch. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Materials used by the Instrument Division of...Ch. 10 - Prob. 18ECh. 10 - GHT Tech Inc. sells electronics over the Internet....Ch. 10 - Profit center responsibility reporting for a...Ch. 10 - Prob. 3PACh. 10 - Effect of proposals on divisional performance A...Ch. 10 - Divisional performance analysis and evaluation The...Ch. 10 - Prob. 6PACh. 10 - Prob. 1PBCh. 10 - Prob. 2PBCh. 10 - Prob. 3PBCh. 10 - Prob. 4PBCh. 10 - Divisional performance analysis and evaluation The...Ch. 10 - Prob. 6PBCh. 10 - Prob. 1MADCh. 10 - Prob. 2MADCh. 10 - Papa Johns International, Inc. (PZZA), operates...Ch. 10 - Panera Bread Company (PNRA) operates over 2,000...Ch. 10 - Prob. 5MADCh. 10 - Prob. 1TIFCh. 10 - Prob. 2TIFCh. 10 - Prob. 3TIFCh. 10 - The three divisions of Yummy Foods are Snack...Ch. 10 - Prob. 5TIFCh. 10 - Prob. 1CMACh. 10 - Prob. 2CMACh. 10 - Prob. 3CMACh. 10 - Morrisons Plastics Division, a profit center,...
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