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eBook Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions...

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Accounting

eBook

Calculating Residual Income

Forchen, Inc., provided the following information for two of its divisions for last year:

Small Appliances Division Cleaning Products Division
Sales $34,680,000 $31,340,000
Operating income 2,490,100 1,252,500
Operating assets, January 1 6,394,000 5,680,000
Operating assets, December 31 7,530,000 6,350,000

Forchen, Inc., requires an 6 percent minimum rate of return.

Required:

1. Calculate residual income for the Small Appliances Division.

$ fill in the blank 1

2. Calculate residual income for the Cleaning Products Division.

$ fill in the blank 2

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