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Problem - Selected sales and operating data for three divisions of different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$5,400,000
$10,800,000
$8,100,000
Average operating assets
$1,410,000
$5,500,000
$2,000,000
Net operating income
$295,000
$899,000
$320,000
Minimum required rate of return
14%
17%
16%
Required -
1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover.
2. Compute the residual income for each division.
The general manager proposed changes in the company's accounting policies in a few areas in an attempt to show a higher profit. He met the company's auditors to discuss these ideas. What do you think the auditors should have said?
The Clipper Corporation had net operating income of $380,000 and average operating assets of $2,000,000. Calculate the company's return on investment (ROI)
RBI Company produces baseball bats. Each bat requires 4 pounds of aluminum alloy. Management predicts that 10,000 bats and 28,000 pounds of aluminum alloy.
Describe some of the information a good AIS could have provided for this firm and that, if provided in a timely manner, could have helped avoid some of its problems.
nate arranges for 21400 of home improvement work to be done on his house financed with payments of 401 per month for 5
The building has a 3-year life with no salvage value. Lessor's target rate of return is 8% and Lessee is aware of this rate. There are no uncertainties regarding costs or collections.
Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and retiree benefits for 2011.
The Yellow Appliance Company, an accrual basis taxpayer, sold goods in December 2005 for $10,000 under terms which allowed the customer to return the goods and receive a refund within 60 days of the sale.
OPERATING LEVERAGE AND BREAK-EVEN ANALYSIS Olinde Electronics Inc. produces stereo components that sell at P = $100 per unit. Olinde's fixed costs are $200,000, variable costs are $50 per unit, 5,000 components are produced and sold each year, EBI..
Prepare a statement of owner's equity for the year ended July 31. No additional investments were made during the year.
Journalize and post adjusting entries. Prepare an adjusted trial balance.
The Ness Company sells $5,000,000 of five-year, 10% bonds on January 1, 2011. The bonds have an effective yield of 9%.
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