The residual income for the Division A of Magnolia Company for an income from operations of $80,000 will be $32,000.
<h3>What is residual income?</h3>
Residual Income is the total of total income from operations less the minimum acceptable rate of return on the deployed assets for such operations over a financial period.
Using the above information, it can be ascertained that the residual income will be,
Hence, the residual income will be as computed above.
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Answer:
<em>Carlton files a petition in bankruptcy. One of the goals of bankruptcy law with respect to a debtor is </em><em>to </em><em>provide a fresh start, free from creditors' claims </em>
Answer:
Date Account Titles and Explanation Debit Credit
Land $84,000
Common stock $12,000
Paid in capital in excess of par value $72,000
Workings:
Amount of Common stock = Number of shares * Paid in capital per share
= 6,000 shares * $2
= $12,000
Amount of excess of paid in capital = Market value of land - Amount of common stock
= $84,000 - $12,000
= $72,000
Answer:
No, taking into account the pandemic, companies should not reduce their leverage, as this would make it very difficult for small and medium investors to invest in a context of lack of income and shortage of available circulating money.
Therefore, leverage implies the possibility for investors to access the necessary funds to be able to invest their money, without the need to dispose of their savings or the money they use for essential activities.
