Benson Corporation operates three investment centers. The following financial statements apply to the investment center namedBowman Division.BOWMAN DIVISIONIncome StatementFor the Year Ended December 31, Year 2$107,28058,47548,805Sales revenueCost of goods soldGross marginOperating expensesSelling expensesDepreciation expenseOperating incomeNonoperating itemLoss on sale of land(2,680)(4,055)42,070(4,600)$ 37,470Net incomeBOWMAN DIVISIONBalance SheetAs of December 31, Year 2Assets$ 12,66240,41637,70090,3789,100CashAccounts receivableMerchandise inventoryEquipment less accumulated depreciationNonoperating assetsTotal assets$190,256LiabilitiesAccounts payableNotes payableStockholders' equity9,45769,000$Common stock79,00032,799Retained earningsTotal liabilities and stockholder's equity$190,256Requiredc. Calculate the ROI for Bowman.d. Benson has a desired ROl of 13 percent. Headquarters has $91,000 of funds to assign to its investment centers. The manager of theBowman Division has an opportunity to invest the funds at an ROI of 15 percent. The other two divisions have investmentopportunities that yield only 14 percent. Calculate the new ROI for Bowman division, if the investment opportunity is adopted byBowman.e. Based on the original data, calculate the original residual income. Also, calculate the new residual income based on informationprovided in Requirement d. Complete this question by entering your answers in the tabs below.Required CRequired DRequired ECalculate the ROI for Bowman. (Round your answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).)ROI%< Required CRequired D>

Return on investment- Return on investment or return on costs is a proportion among net income and…

Benson Corporation operates three investment centers. The following financial statements apply to the investment center named Bowman Division. BOWMAN DIVISION Income Statement For the Year Ended December 31, Year 2 $107,280 58,475 48,805 Sales revenue Cost of goods sold Gross margin Operating expenses Selling expenses Depreciation expense Operating income Nonoperating item Loss on sale of land (2,680) (4,055) 42,070 (4,600) $ 37.470 Net income

Benson Corporation operates three investment centers. The following financial statements apply to the investment center named Bowman Division. BOWMAN DIVISION Income Statement For the Year Ended December 31, Year 2 $107,280 58,475 48,805 Sales revenue Cost of goods sold Gross margin Operating expenses Selling expenses Depreciation expense Operating income Nonoperating item Loss on sale of land (2,680) (4,055) 42,070 (4,600) $ 37.470 Net income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following data are taken from the records of Dove Company, a division of Oasis Corporation for the year ended December 31, 2021 Sales 120,000,000.00Less: Variable Cost and Expenses 8,000,000.00Contribution Margin 4,000,000.00Less:: Direct Fixed Cost and Expenses 1,000,000.00Segment Income 3,000,000.00 The company used an average assets of P8,000,000.00 in 2021. The cost of capital is 12% Calculate the following:1. Return on Sales2. Asset Turnover3. ROI4. Residual Income
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SONAD COMPANY Income Statement For Year Ended December 31 Sales $ 2,123,000 Cost of goods sold 1,040,270 Gross profit 1,082,730 Operating expenses Salaries expense $ 290,851 Depreciation expense 50,952 Rent expense 57,321 Amortization expenses—Patents 6,369 Utilities expense 23,353 428,846 653,884 Gain on sale of equipment 8,492 Net income $ 662,376 Accounts receivable $ 27,750 increase Accounts payable $ 15,725 decrease Inventory 24,000 increase Salaries payable 5,050 decrease Prepare the operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.)
The following information is given to you relating to the operations of PrincehallCorporation: The income tax rate is 40%. Net sales $11,862 Cost of sales 8,321 Gross margin ? Selling, general, and administrative expenses $ 2,743 Depreciation, amortization, and asset write-offs 278 Total operating expenses: ? Income from operations : ? Interest expense 91 Interest and other income 11 Earnings before income taxes: ? Income taxes ? Net earnings: ? Determine the earnings before taxes:
The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: RailsDivision LocomotiveDivision CorporateTotal Cost of goods sold $46,700 $29,300 Direct operating expenses 26,400 20,400 Sales 98,200 69,700 Interest expense $2,200 General overhead 19,900 Income tax 4,500 The net income for Train Corporation is a.$73,800 b.$91,900 c.$18,500
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The following are financial data taken from the annual report of Foundotos Company: Year 2 $134,448 51,981 37,154 57,504 Net sales Gross property, plant and equipment Accumulated depreciation Intangible assets (net) A. Calculate the following ratios for Year 1 and Year 2: 1. Fixed asset turnover 2. Accumulated depreciation divided-by-gross fixed assets B. What do the trends in these ratios reveal about Foundotos? Year 1 $130,060 47,744 34,180 36,276
Louisville Inc. reported the following financial data for one of its divisions for the year; average invested assets of $560,000; sales of $1,020,000; and income of $123,420. The investment center profit margin is: Multiple Choice 182.1%. 22.0%. 12.1%. 54.9%. 453.7%.
Lousiville Inc. reported the following financial data for one of its divisions for the year; average invested assets of $490,000; sales of $990,000; and income of $113,000. The investment turnover is: Multiple Choice 2.02. 21.30. 433.60. 49.50. 11.40.
Franklin Corporation's balance sheet indicates that the company has $570,000 invested in operating assets. During Year 2, Franklin earned operating income of $64,980 on $1,140,000 of sales. Required a. Compute Franklin's profit margin for Year 2. b. Compute Franklin's turnover for Year 2. c. Compute Franklin's return on investment for Year 2. d. Recompute Franklin's ROI under each of the following independent assumptions: (1) Sales increase from $1,140,000 to $1,368,000, thereby resulting in an increase in operating income from $64,980 to $82,080. (2) Sales remain constant, but Franklin reduces expenses, resulting in an increase in operating income from $64.980 to $67,260. (3) Franklin is able to reduce its invested capital from $570,000 to $456,000 without affecting operating income. Complete this question by entering your answers in the tabs below. Req A to C Req D Compute Franklin's profit margin, turnover and return on investment for Year 2. Note: Round "Profit margin" and "Return…
A condensed income statement for the Electronics Division of Gihbli Industries Inc. for the year ended December 31 is as follows: Sales $3,920,000 Cost of goods sold 2,625,200 Gross profit $ 1,294,800 Operating expenses 746,000 Income from operations $ 548,800 Invested assets $2,800,000 Assume that the Electronics Division received no charges from service departments. The president of Gihbli Industries Inc. has indicated that the division’s return on a $2,800,000 investment must be increased to at least 22.4% by the end of the next year if operations are to continue. The division manager is considering the following three proposals: Proposal 1: Transfer equipment with a book value of $560,000 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would be less than the amount of depreciation expense on the old equipment by $100,800. This decrease in expense would be included as part of the cost of goods sold. Sales would remain…