Question

Determining missing items in return and residual income computations

Data are presented in the following table of returns on investment and residual incomes:

Invested Assets |
Operating Income |
Return on Investment |
Minimum Return on Investment |
Minimum Acceptable Operating
Income |
Residual Income |
||||||

$850,000 | $187,000 | (a) | 12% | (b) | (c) | ||||||

$480,000 | (d) | (e) | (f) | $52,800 | $24,000 | ||||||

$290,000 | (g) | 14% | (h) | $29,000 | (i) | ||||||

$220,000 | $46,200 | (j) | 13% | (k) | (l) |

Determine the missing items, identifying each item by the appropriate letter. For all amounts, round to the nearest whole number.

a. |
% | ||||||||

b. |
$ | ||||||||

c. |
$ | ||||||||

d. |
$ | ||||||||

e. |
% | ||||||||

f. |
% | ||||||||

g. |
$ | ||||||||

h. |
% | ||||||||

i. |
$ | ||||||||

j. |
% | ||||||||

k. |
$ | ||||||||

l. |
$ |

Answer #1

Determining missing items in return and residual income
computations
Data for Uberto Company are presented in the following table of
rates of return on investment and residual incomes:
Invested Assets
Income from Operations
Return on Investment
Minimum
Return
Minimum
Acceptable Income from Operations
Residual Income
$780,000
$202,800
(a)
15%
(b)
(c)
$580,000
(d)
(e)
(f)
$63,800
$29,000
$340,000
(g)
14%
(h)
$37,400
(i)
$260,000
$54,600
(j)
13%
(k)
(l)
Determine the missing values, identified by the letters above.
For all...

Determining missing items in return and residual income
computations Data for Uberto Company are presented in the following
table of rates of return on investment and residual incomes:
Invested Assets Income from Operations Return on Investment Minimum
Return Minimum Acceptable Income from Operations Residual Income
$790,000 $181,700 (a) 13% (b) (c) $520,000 (d) (e) (f) $57,200
$26,000 $300,000 (g) 14% (h) $33,000 (i) $230,000 $43,700 (j) 12%
(k) (l) Determine the missing values, identified by the letters
above. For all...

Determining missing items in return and residual income
computations Data for Uberto Company are presented in the following
table of rates of return on investment and residual incomes:
Invested Assets
Income from Operations
Return on Investment
Minimum Return
Minimum Acceptable Income from
Operations
Residual Income
$920,000
$239,200
(a)
15%
(b)
(c)
$600,000
(d)
(e)
(f)
$72,000
$24,000
$350,000
(g)
14%
(h)
$38,500
(i)
$260,000
$49,400
(j)
12%
(k)
(l)
Determine the missing values, identified by the letters above.
For all...

Determining missing items in return and residual income
computations
Data for Uberto Company are presented in the following table of
rates of return on investment and residual incomes:
Invested Assets
Income from Operations
Return on Investment
Minimum Return
Minimum Acceptable Income from
Operations
Residual Income
$940,000
$244,400
(a)
15%
(b)
(c)
$510,000
(d)
(e)
(f)
$61,200
$20,400
$300,000
(g)
14%
(h)
$33,000
(i)
$230,000
$46,000
(j)
12%
(k)
(l)
Determine the missing values, identified by the letters above.
For all...

Determining missing items in return and residual income
computations
Data for Uberto Company are presented in the following table of
rates of return on investment and residual incomes:
Invested Assets
Income from Operations
Return on Investment
Minimum
Return
Minimum
Acceptable Income from Operations
Residual Income
$940,000
$244,400
(a)
15%
(b)
(c)
$520,000
(d)
(e)
(f)
$62,400
$20,800
$320,000
(g)
14%
(h)
$32,000
(i)
$240,000
$45,600
(j)
11%
(k)
(l)
Determine the missing values, identified by the letters above.
For all...

The operating income and the amount of invested assets in each
division of Conley Industries are as follows:
Operating income
Invested Assets
Retail Division
$60,800
$320,000
Commercial Division
52,800
240,000
Internet Division
181,700
790,000
Assume that management has established a 8% minimum acceptable
return for invested assets.
a. Determine the residual income for each
division.
Retail Division
Commercial Division
Internet Division
Operating income
$60,800
$52,800
$181,700
Minimum acceptable operating income as a percent of invested
assets
Residual income
-----------------------------------------------------------------------------
Determining...

The following information for companies X, Y, and Z is
incomplete. Supply the missing data. (Negative amounts
should be indicated by a minus sign. Round your return on
investment to 1 decimal place. Omit the "$" and "%" signs in your
response).
Company X
Company Y
Company Z
Operating
income
$
220,000
$
$
Sales
$
$
$
Invested
capital
$
$
6,000,000
$
32,000,000
Return on
sales
32
%
40
%
%
Capital
turnover
20
%
%
30...

Presented below is selected financial information for two
divisions of Samberg Brewing. Supply the missing information for
the lettered items.
Lager Lite Lager
Contribution margin $500,000 $300,000
Controllable margin 200,000 (c)
Average operating assets $ (a) $1,200,000
Minimum rate of return % (b) 11 %
Return on investment 16 % % (d)
Residual income $100,000 $204,000

Presented below is selected financial information for two
divisions of Samberg Brewing. Supply the missing information for
the lettered items. (Round minimum rate of return and ROI to 1
decimal place, e.g. 10.5%.) Lager Lite Lager Contribution margin
$500,000 $300,000 Controllable margin 200,000 (c) Average operating
assets $ (a) $1,200,000 Minimum rate of return % (b) 11 % Return on
investment 16 % % (d) Residual income $100,000 $204,000

Data on three unrelated companies are given in the following
table
Fill in the missing information in the preceding table. (Enter
the capital turnover to two decimal places X.XX.)
Preston, Inc.
Sales. . . . . . . . . . . . . . . . . . . . . . .
$116,000
Operating income. . . . . . . . . . . . .
$46,400
Total assets. . . . . . . . ....

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