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Divisional income statements and return on investment analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Electronic Brokerage Mutual Fund Division Division $1,750,000 $1,810,000 $1,770,000 Operating expenses 854,000 760,600 1,251,600 Invested assets 6,400,000 5,300,000 3,600,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Fee revenue Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Line Item Description Fee revenue Operating expenses Operating income Mutual Electronic Investment Fund Brokerage Banking Division Division Division $ Investment Banking Division $ W

Divisional income statements and return on investment analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Electronic Brokerage Mutual Fund Division Division $1,750,000 $1,810,000 $1,770,000 Operating expenses 854,000 760,600 1,251,600 Invested assets 6,400,000 5,300,000 3,600,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Fee revenue Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Line Item Description Fee revenue Operating expenses Operating income Mutual Electronic Investment Fund Brokerage Banking Division Division Division $ Investment Banking Division $ W

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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Divisional income statements and return on investment analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Fee revenue Mutual Fund Division $1,750,000 $1,810,000 $1,770,000 Operating expenses 854,000 760,600 1,251,600 Invested assets 6,400,000 5,300,000 3,600,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: Line Item Description Fee revenue 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Operating expenses Operating income Electronic Brokerage Division Mutual Electronic Investment Fund Brokerage Banking Division Division Division $ Investment Banking Division $ 4
Transcribed Image Text:Divisional income statements and return on investment analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Fee revenue Mutual Fund Division $1,750,000 $1,810,000 $1,770,000 Operating expenses 854,000 760,600 1,251,600 Invested assets 6,400,000 5,300,000 3,600,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: Line Item Description Fee revenue 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Operating expenses Operating income Electronic Brokerage Division Mutual Electronic Investment Fund Brokerage Banking Division Division Division $ Investment Banking Division $ 4
Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Line Item Description Fee revenue Operating expenses Operating income Mutual Electronic Investment Fund Brokerage Banking Division Division Division Division $ 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. Round your answers to one decimal place. Basis for planning a future expansion of operations. Profit Margin Investment Turnover % Mutual Fund Division Electronic Brokerage Division Investment Banking Division 3. When faced with limited funds for expansion, management should consider an expansion of the % % ROI % % % Division first.
Transcribed Image Text:Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Line Item Description Fee revenue Operating expenses Operating income Mutual Electronic Investment Fund Brokerage Banking Division Division Division Division $ 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. Round your answers to one decimal place. Basis for planning a future expansion of operations. Profit Margin Investment Turnover % Mutual Fund Division Electronic Brokerage Division Investment Banking Division 3. When faced with limited funds for expansion, management should consider an expansion of the % % ROI % % % Division first.
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