The income from operations and the amount of invested assets in each division of Beck Industries are as follows:   Income from Operations Invested Assets Retail Division $119,700   $630,000   Commercial Division 50,400   240,000   Internet Division 112,500   750,000   Assume that management has established a 12% minimum acceptable return for invested assets.   a.  Determine the residual income for each division.   Retail Division Commercial Division Internet Division Income from operations $119,700 $50,400 $112,500 Minimum acceptable income from operations as a percent of invested assets             Residual income $   $   $

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Residual Income

The income from operations and the amount of invested assets in each division of Beck Industries are as follows:

  Income from Operations Invested Assets
Retail Division $119,700   $630,000  
Commercial Division 50,400   240,000  
Internet Division 112,500   750,000  

Assume that management has established a 12% minimum acceptable return for invested assets.

 

a.  Determine the residual income for each division.

  Retail Division Commercial Division Internet Division
Income from operations $119,700 $50,400 $112,500
Minimum acceptable income from operations as a percent of invested assets            
Residual income $   $   $  

 

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