Quinn Company has two divisions, Domestic and International. Invested assets and condensed income statement data for...

Quinn Company has two divisions, Domestic and International. Invested assets and condensed income statement data for each division for the year ended December 31, 2009, are as follows:

Domestic Division International Division

Revenues $675,000 $480,000

Operating expenses 450,000 372,400

Service department charges 90,000 50,000

Invested assets 600,000 384,000

Instructions

1. Prepare condensed income statements for the past year for each division.

2. Using the DuPont formula, determine the profit margin, investment turnover, and return

on investment for each division.

3. If management’s minimum acceptable return on investment is 10%, determine the residual

income for each division.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has...

An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years. SIMON COMPANY Income Statement For the Year Ended December 31, 2017 Prepare a correct multiple-step income statement. Revenues Net sales $850,000 Other revenues 22,000 Cost of goods sold 555,000 Gross profit 317,000 Operating expenses Selling expenses 109,000 Administrative expenses 103,000 Net earnings $105,000 As an experienced, knowledgeable accountant, you review the statement and determine the following...

Power Inc. has two divisions, Windsor and Ridge. Following is the income statement for the past...

Power Inc. has two divisions, Windsor and Ridge. Following is the income statement for the past month: Windsor Ridge Total Sales $ 360,000 $ 320,000 $ 680,000 Variable Costs 280,000 150,000 $ 430,000 Contribution Margin $ 80,000 $ 170,000 $ 250,000 Fixed Costs (allocated) 122,000 128,000 $ 250,000 Profit Margin $ (42,000 ) $ 42,000 $ 0 What would the impact on operating income be if Power Inc. discontinued the Windsor Division and could save $24,000 in allocated fixed costs?

Tennessee Company is geographically segmented into two divisions – East and West. The company’s income statement...

Tennessee Company is geographically segmented into two divisions – East and West. The company’s income statement for the last month is presented below: Total Company Division % of sales West % sales East % sales Sales $8,500,000 $4,675,000 $3,825,000 Variable expenses 3,395,750 1,636,250 1,759,500 Contribution margin $5,104,250 60% $3,038,750 65% $2,065,500 54% Total Fixed expenses 3,825,000 45% 1,912,500 41% 1,912,500 50% Net income $1,279,250 15% $1,126,250 24% $153,000 4% Management is concerned with the reported results, especially the East Division’s...

Problem 2-6A Condensed balance sheet and income statement data for Blossom Company are presented as follows....

Problem 2-6A Condensed balance sheet and income statement data for Blossom Company are presented as follows. Blossom Company Balance Sheets December 31 Assets 2017 and 2016 (respectively) Cash $ 30,700 $ 22,700 Receivables (net) 82,100 74,100 Other current assets 102,100 85,100 Long-term investments 62,000 60,000 Property, plant, and equipment (net) 522,100 482,100 Total assets $ 799,000 724,000 Liabilities and Stockholders’ Equity Current liabilities $ 77,700 $ 72,700 Long-term liabilities 92,100 102,100 Common stock 342,100 312,100 Retained earnings 287,100 237,100 Total...

Condensed statement of financial position and income statement data for Richetti Ltd. are shown below: RICHETTI...

Condensed statement of financial position and income statement data for Richetti Ltd. are shown below: RICHETTI LTD. Statement of Financial Position December 31 (in thousands) 2018 2017 2016 Assets Current assets Cash $28 $81 $200 Accounts receivable 908 707 497 Inventory 1,188 794 504 Total current assets 2,124 1,582 1,201 Property, plant, and equipment (net) 4,076 3,778 3,195 Total assets $6,200 $5,360 $4,396 Liabilities and Shareholders’ Equity Liabilities Current liabilities $600 $553 $497 Non-current liabilities 3,042 2,330 1,491 Total liabilities...

Zumbrunn Company’s income statement contained the following condensed information. ZUMBRUNN COMPANY Income Statement For the Year...

Zumbrunn Company’s income statement contained the following condensed information. ZUMBRUNN COMPANY Income Statement For the Year Ended December 31, 2020 Service revenue $970,400 Operating expenses, excluding depreciation $624,100 Depreciation expense 55,400 Loss on disposal of plant assets 25,200 704,700 Income before income taxes 265,700 Income tax expense 39,100 Net income $226,600 Zumbrunn’s balance sheets contained the comparative data at December 31, shown below. 2020 2019 Accounts receivable $75,200 $59,800 Accounts payable 40,400 28,900 Income taxes payable 13,000 6,400 Accounts payable...

Condensed balance sheet and income statement data for Landwehr Corporation appear below.

Condensed balance sheet and income statement data for Landwehr Corporation appear below. Additional information: 1. The market price of Landwehr’s common stock was $4.00, $5.00, and $8.00 for 2016, 2017, and 2018, respectively. 2. All dividends were paid in cash. Instructions (a) Compute the following ratios for 2017 and 2018. (1) Profit margin. (2) Asset turnover. (3) Earnings per share. (Weighted-average common shares in 2018 were 32,000 and in 2017 were 31,000.) (4) Price-earnings ratio. (5) Payout ratio....

1. Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent...

1. Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $406,100 $310,000 Cost of goods sold 335,400 260,000 Gross profit $70,700 $50,000 Selling expenses $21,780 $18,000 Administrative expenses 19,350 15,000 Total operating expenses $41,130 $33,000 Income before income tax $29,570 $17,000 Income tax expenses 11,800 6,800 Net income $17,770 $10,200 a. Prepare a comparative income statement with horizontal analysis, indicating the increase...

Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years...

Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $925,000 $740,000 Cost of goods sold 780,800 640,000 Gross profit $144,200 $100,000 Selling expenses $41,400 $36,000 Administrative expenses 36,900 30,000 Total operating expenses $78,300 $66,000 Income before income tax $65,900 $34,000 Income tax expenses 26,400 13,600 Net income $39,500 $20,400 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)...

Horizontal Analysis of the Income Statement Income statement data for Boone Company for two recent years...

Horizontal Analysis of the Income Statement Income statement data for Boone Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $546,000 $420,000 Cost of goods sold 473,600 370,000 Gross profit $72,400 $50,000 Selling expenses $21,600 $18,000 Administrative expenses 19,200 15,000 Total operating expenses $40,800 $33,000 Income before income tax $31,600 $17,000 Income tax expenses 12,600 6,800 Net income $19,000 $10,200 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease)...

Subjects