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Determining missing items from computations Data for the North, South, Last, 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) (1) a. Determine the missing items, identifying each by the letters (a) through (l). Round percents and investment turnover to one decimal place. b. Determine the residual income for each division, assuming that the minimum acceptable return established by management is 12%. c. Which division is the most profitable in terms of (1) return on investment and (2) residual income?

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

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Chapter
Section
Chapter 24, Problem 24.16EX
Textbook Problem

Determining missing items from computations

 Data for the North, South, Last, 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) (1)

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

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

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

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Chapter 24 Solutions

Accounting
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