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zepelin [54]
3 years ago
9

Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,00

0; sales of $4,525,000; cost of goods sold of $2,550,000; and operating expenses of $1,372,000. Assume a target income of 10% of average invested assets. Compute residual income for the division:
Business
1 answer:
sveticcg [70]3 years ago
5 0

Answer:

$193,000

Explanation:

                              Carter Company

Sales                                                         4,525,000

Cost of goods sold                                  <u>-2,550,000</u>

                                                                1,975,000

Operating expenses                                <u>-1,372,000</u>

Net Income                                               603,000

Average invested assets     4,100,000

Target income 10%                410,000       <u>410,000</u>

Residual income                                       <u>$193,000</u>

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