Question 12 6 pts Beach Front Industries has sales of $546,000, costs of $295,000, depreciation expense...

Question

Question

Answer 1

Answer #1

Net Residual Income is the addition to retained earnings after payment of dividends

= (Sales - Costs - Depreciation - Interest) x (1 - Tax Rate) - Dividends

= ($546,000 - $295,000 - $37,000 - $15,000) x (1 - 0.21) - $59000

= $199,000 x 0.79 - $59,000

= $157,210 - $59,000

= $98,210

So, as per above calculations, option E is the correct option

Answer 2

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