Determining Missing Items from Computations Data for the North, South, East and West divisions of Free Bird Company are as follows:   Sales Income from Operations Invested Assets Return on Investment Profit Margin Investment Turnover North   $860,000   (a)   (b)   17.5%   7.0%   (c)   South   (d)   $51,300   (e)   (f)   4.5%   3.8   East   $1,020,000   (g)   $680,000   15.0%   (h)   (i)   West   $1,120,000   $89,600   $560,000   (j)   (k)   (l)   a.  Determine the missing items, identifying each by the letters (a) through (l). If required, round percents and investment turnover to one decimal place.                         a. $   b. $   c.     d. $   e. $   f.   % g. $   h.   % i.     j.   % k.   % l.     b.  Determine the residual income for each division, assuming that the minimum acceptable rate of return established by management is 12%. Division Residual Income North Division $ South Division $ East Division $ West Division $ c.  Which division is the most profitable in terms of (1) return on investment and (2) residual income?   Most Profitable 1.  Return on Investment   2.  Residual Income

Principles of Accounting Volume 1
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Chapter9: Accounting For Receivables
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Problem 4TP: You are considering two possible companies for investment purposes. The following data is available...
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Determining Missing Items from Computations

Data for the North, South, East and West divisions of Free Bird Company are as follows:


 

Sales

Income from Operations

Invested Assets
Return on Investment Profit Margin
Investment Turnover
North   $860,000   (a)   (b)   17.5%   7.0%   (c)  
South   (d)   $51,300   (e)   (f)   4.5%   3.8  
East   $1,020,000   (g)   $680,000   15.0%   (h)   (i)  
West   $1,120,000   $89,600   $560,000   (j)   (k)   (l)  

a.  Determine the missing items, identifying each by the letters (a) through (l). If required, round percents and investment turnover to one decimal place.

                       
a. $  
b. $  
c.    
d. $  
e. $  
f.   %
g. $  
h.   %
i.    
j.   %
k.   %
l.    

b.  Determine the residual income for each division, assuming that the minimum acceptable rate of return established by management is 12%.

Division Residual Income
North Division $
South Division $
East Division $
West Division $

c.  Which division is the most profitable in terms of (1) return on investment and (2) residual income?

  Most Profitable
1.  Return on Investment  
2.  Residual Income  
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