MANGERIAL ACC.(LOOSE)W/CONNECT CUST.>IC
MANGERIAL ACC.(LOOSE)W/CONNECT CUST.>IC
16th Edition
ISBN: 9781260636864
Author: Garrison
Publisher: MCG CUSTOM
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Chapter 11, Problem 6E
To determine

Calculating Margin, Turnover and Return of Income for Division: In order to find the performance of a department, parameters such as Margin, Turnover and return of income are used. Margin is a ratio of Net Income to Sales. Turnover is a ratio of Sales to Assets and Return of Income is a ratio of Net Income to Assets.

Requirement 1:

Return on Investment in terms of margin and Turnover.

Requirement 2

To determine

Residual income for each division.

Requirement 2

To determine

If higher residual indicates better management.

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On January 1, 2024, Packard Corporation leased equipment to Hewlitt Company. The lease term is 9 years. The first payment of $457,000 was made on January 1, 2024. Remaining payments are made on December 31 each year, beginning with December 31, 2024. The equipment cost Packard Corporation $2,956,548. The present value of the lease payments is $2,986,412. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 9%, what will be the balance reported as a liability by Hewlitt in its balance sheet on December 31, 2025?

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MANGERIAL ACC.(LOOSE)W/CONNECT CUST.>IC

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