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Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions for last year:            Small Appliances Division Cleaning Products Division Sales $34,610,000      $31,300,000      Operating income 2,723,200      1,254,300      Operating assets, January 1 6,394,000      5,750,000      Operating assets, December 31 7,520,000      6,120,000        Forchen, Inc., requires an 7 percent minimum rate of return. Required: 1. Calculate residual income for the Small Appliances Division. $ fill in the blank 2. Calculate residual income for the Cleaning Products Division. $ fill in the blank

Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions for last year:            Small Appliances Division Cleaning Products Division Sales $34,610,000      $31,300,000      Operating income 2,723,200      1,254,300      Operating assets, January 1 6,394,000      5,750,000      Operating assets, December 31 7,520,000      6,120,000        Forchen, Inc., requires an 7 percent minimum rate of return. Required: 1. Calculate residual income for the Small Appliances Division. $ fill in the blank 2. Calculate residual income for the Cleaning Products Division. $ fill in the blank

FINANCIAL ACCOUNTING
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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Calculating Residual Income

Forchen, Inc., provided the following information for two of its divisions for last year:

           Small Appliances
Division		 Cleaning Products
Division
Sales $34,610,000      $31,300,000     
Operating income 2,723,200      1,254,300     
Operating assets, January 1 6,394,000      5,750,000     
Operating assets, December 31 7,520,000      6,120,000     

 

Forchen, Inc., requires an 7 percent minimum rate of return.

Required:

1. Calculate residual income for the Small Appliances Division.

$ fill in the blank

2. Calculate residual income for the Cleaning Products Division.

$ fill in the blank 

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