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Exercise 15-15 Residual income LO 15-7 Adams Cough Drops operates two divisions. The following information pertains to...
Walton Cough Drops operates two divisions. The following information pertains to each division for 2018: Sales...
Walton Cough Drops operates two divisions. The following information pertains to each division for 2018: Sales Operating income Average operating assets Company's desired rate of return Division A $200,000 $ 16,400 $ 54,000 13% Division B $ 89,000 $ 8,900 $41,000 13% Required a. Compute each division's residual income. b. Which division increased the company's profitability more? Residual Income a. Division A Division B b. The division that increased the company's profitability more is
Residual Income Washington Company has two divisions: the Adams Division and the Jefferson Division. The following...
Residual Income Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results: Adams Division Jefferson Division Net (after-tax) income $677,600 $343,350 3,315,000 Total capital employed 4,760,000 In addition, Washington Company's top management has set a minimum acceptable rate of return equal to 9%. Required: Enter negative values as negative numbers. 1. Calculate the residual income for the Adams Division. 2. Calculate the residual income for the Jefferson Division. $
Residual Income Washington Company has two divisions: the Adams Division and the Jefferson Division. The following...
Residual Income Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results: Adams Division Jefferson Division Net (after-tax) income $641,300 $321,300 Total capital employed 4,600,000 3,867,500 In addition, Washington Company's top management has set a minimum acceptable rate of return equal to 11%. Required: Enter negative values as negative numbers. 1. Calculate the residual income for the Adams Division. $ 2. Calculate the residual income for the Jefferson Division. $
Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains...
Washington Company has two divisions: the Adams Division and the
Jefferson Division. The following information pertains to last
year's results:
Adams Division Jefferson Division
Net (after-tax) income $611,050 $359,100
Total capital employed 4,720,000 3,672,500
Washington's actual cost of capital was 11%.
Required:
1. Calculate the EVA for the Adams Division. If required, enter
a negative EVA as a negative number by entering your answer with
the minus sign.
$
2. Calculate the EVA for the Jefferson Division. If required,
enter...
Rachael Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required...
Rachael Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 11%. In April, the Commercial Products Division had average operating assets of $100,000 and net operating income of $20,000. What was the Commercial Products Division's residual income in April? Group of answer choices A. $9,000 B. $80,000 C. $79,000 D. $20,000
The following information pertains to the three divisions of Yang Company: Division A Division B Division...
The following information pertains to the three divisions of Yang Company: Division A Division B Division C Sales ? ? $1,345,000 Net operating income $48,000 $18,000 $82,000 Average operating assets $420,000 ? ? Return on investment ? 15% 20% Margin 0.2 0.015 ? Turnover 2.1 ? ? Target ROI 17% 14% 8% What is the turnover for Division C? a.6.670 b.3.28 c.1.500 d.0.20
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division...
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division A Division B Sales ? Net operating $48,000 418,000 income Average operating $420,000 assets Return on 15% investment Margin 0.2 0.015 Turnover 2.1 Target ROI 17% 14% 20% 8% What are the average operating assets for Division C? $95,000 $410,000 $82,000 $420,000 What are the average operating assets for Division B? $125,000 $120,000 $18,000 $420,000
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division...
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division A Division B Sales ? ? Net operating $48,000 418,000 income Average operating $420,000 ? assets Return on 15% investment Margin 0.2 0.015 Turnover 2.1 Target ROI 17% 14% ? 20% ? 8% 8. What are the average operating assets for Division C? $95,000 $410,000 $82,000 $420,000 What are the average operating assets for Division B? $125,000 $120,000 $18,000 $420,000
Exercise 6-14A Segment elimination decision LO 6-4 Adams Company operates three segments. Income statements for the...
Exercise 6-14A Segment elimination decision LO 6-4 Adams Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. ADAMS COMPANY Income Statements for the Year 2018 Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income $ 167,000 (122,000) (17,000) 28,000 (38,000) (7,000) $ (17,000) $238,000 (90,000) (29,000) 119,000 (39,000) (17,000) $ 63,000 $258,000...
The following information pertains to the three divisions of Yang Limited: Division C $1,345,000 $82,000 Division...
The following information pertains to the three divisions of Yang Limited: Division C $1,345,000 $82,000 Division B Division A Sales Net operating income 418,000 $48,000 Average operating $420,000 ? assets Return on ? 20% 15% investment Margin Turnover 0.2 0.015 ? 2.1 ? Target ROI 17% 14% 8% 8 What are the average operating assets for Division C? A. $95,000 $410,000 В. С. $82,000 $420,000 D. 9. What are the average operating assets for Division B? A. $125,000 $120,000 $18,000...
Walton Cough Drops operates two divisions. The following information pertains to each division for 2018: Sales Operating income Average operating assets Company's desired rate of return Division A $200,000 $ 16,400 $ 54,000 13% Division B $ 89,000 $ 8,900 $41,000 13% Required a. Compute each division's residual income. b. Which division increased the company's profitability more? Residual Income a. Division A Division B b. The division that increased the company's profitability more is
Residual Income Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results: Adams Division Jefferson Division Net (after-tax) income $677,600 $343,350 3,315,000 Total capital employed 4,760,000 In addition, Washington Company's top management has set a minimum acceptable rate of return equal to 9%. Required: Enter negative values as negative numbers. 1. Calculate the residual income for the Adams Division. 2. Calculate the residual income for the Jefferson Division. $
Washington Company has two divisions: the Adams Division and the
Jefferson Division. The following information pertains to last
year's results:
Adams Division Jefferson Division
Net (after-tax) income $611,050 $359,100
Total capital employed 4,720,000 3,672,500
Washington's actual cost of capital was 11%.
Required:
1. Calculate the EVA for the Adams Division. If required, enter
a negative EVA as a negative number by entering your answer with
the minus sign.
$
2. Calculate the EVA for the Jefferson Division. If required,
enter...
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division A Division B Sales ? Net operating $48,000 418,000 income Average operating $420,000 assets Return on 15% investment Margin 0.2 0.015 Turnover 2.1 Target ROI 17% 14% 20% 8% What are the average operating assets for Division C? $95,000 $410,000 $82,000 $420,000 What are the average operating assets for Division B? $125,000 $120,000 $18,000 $420,000
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division A Division B Sales ? ? Net operating $48,000 418,000 income Average operating $420,000 ? assets Return on 15% investment Margin 0.2 0.015 Turnover 2.1 Target ROI 17% 14% ? 20% ? 8% 8. What are the average operating assets for Division C? $95,000 $410,000 $82,000 $420,000 What are the average operating assets for Division B? $125,000 $120,000 $18,000 $420,000
Exercise 6-14A Segment elimination decision LO 6-4 Adams Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. ADAMS COMPANY Income Statements for the Year 2018 Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income $ 167,000 (122,000) (17,000) 28,000 (38,000) (7,000) $ (17,000) $238,000 (90,000) (29,000) 119,000 (39,000) (17,000) $ 63,000 $258,000...
The following information pertains to the three divisions of Yang Limited: Division C $1,345,000 $82,000 Division B Division A Sales Net operating income 418,000 $48,000 Average operating $420,000 ? assets Return on ? 20% 15% investment Margin Turnover 0.2 0.015 ? 2.1 ? Target ROI 17% 14% 8% 8 What are the average operating assets for Division C? A. $95,000 $410,000 В. С. $82,000 $420,000 D. 9. What are the average operating assets for Division B? A. $125,000 $120,000 $18,000...
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