Benson Corporation operates three investment centers. The following financial statements apply to the investment center namedBowman Division.BOWMAN DIVISIONIncome StatementFor the Year Ended December 31, Year 2$107,28058,47548,805Sales revenueCost of goods soldGross marginOperating expensesSelling expensesDepreciation expenseOperating incomeNonoperating itemLoss on sale of land(2,680)(4,055)42,070(4,600)$ 37,470Net incomeBOWMAN DIVISIONBalance SheetAs of December 31, Year 2Assets$ 12,66240,41637,70090,3789,100CashAccounts receivableMerchandise inventoryEquipment less accumulated depreciationNonoperating assetsTotal assets$190,256LiabilitiesAccounts payableNotes payableStockholders' equity9,45769,000$Common stock79,00032,799Retained earningsTotal liabilities and stockholder's equity$190,256Requiredc. Calculate the ROI for Bowman.d. Benson has a desired ROl of 13 percent. Headquarters has $91,000 of funds to assign to its investment centers. The manager of theBowman Division has an opportunity to invest the funds at an ROI of 15 percent. The other two divisions have investmentopportunities that yield only 14 percent. Calculate the new ROI for Bowman division, if the investment opportunity is adopted byBowman.e. Based on the original data, calculate the original residual income. Also, calculate the new residual income based on informationprovided in Requirement d. Complete this question by entering your answers in the tabs below.Required CRequired DRequired ECalculate the ROI for Bowman. (Round your answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).)ROI%< Required CRequired D>

Return on investment- Return on investment or return on costs is a proportion among net income and…

Benson Corporation operates three investment centers. The following financial statements apply to the investment center named Bowman Division. BOWMAN DIVISION Income Statement For the Year Ended December 31, Year 2 $107,280 58,475 48,805 Sales revenue Cost of goods sold Gross margin Operating expenses Selling expenses Depreciation expense Operating income Nonoperating item Loss on sale of land (2,680) (4,055) 42,070 (4,600) $ 37.470 Net income

Benson Corporation operates three investment centers. The following financial statements apply to the investment center named Bowman Division. BOWMAN DIVISION Income Statement For the Year Ended December 31, Year 2 $107,280 58,475 48,805 Sales revenue Cost of goods sold Gross margin Operating expenses Selling expenses Depreciation expense Operating income Nonoperating item Loss on sale of land (2,680) (4,055) 42,070 (4,600) $ 37.470 Net income

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter16: Multistate Corporate Taxation

Section: Chapter Questions

Problem 35P

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Rundle Corporation operates three investment centers. The following financial statements apply to the investment center named Bowman Division. Sales revenue Cost of goods sold Gross margin Operating expenses Selling expenses Depreciation expense Operating income Nonoperating item. Loss on sale of land Net income BOWMAN DIVISION Income Statement For the Year Ended December 31, Year 2 Total assets Assets Cash Accounts receivable Merchandise inventory Equipment less accumulated depreciation Nonoperating assets Liabilities BOWMAN DIVISION Balance Sheet As of December 31, Year 2 Accounts payable Notes payable Stockholders' equity Common stock Retained earnings Total liabilities and stockholders' equity Required Required C Required D Required E ROI $ 106,780 58,475 48,305 (2,720) (4,045) 41,540 Complete this question by entering your answers in the tabs below. %6 (4,900) $36,640 c. Calculate the ROI for Bowman. d. Rundle has a desired ROI of 11 percent. Headquarters has $86,000 of funds to…
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