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I NEED THE PROCESS PLEASE!!! STEPS REQUIRED Red Earth Company has two divisions,...

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Accounting

I NEED THE PROCESS PLEASE!!! STEPS REQUIRED

Red Earth Company has two divisions, the Okla Division and the Homa Division. Last year, the Okla Division earned $66,000 using average operating assets of $550,000. Last year, the Homa Division earned $260,000 using average operating assets of $2,000,000. Minimum required rate of return for Red Earth is 9%.

A. For the Okla Division, residual income is __________________.

B. For the Homa Division, residual income is __________________.

Now assume that the minimum required rate of return for Red Earth is 12%.

C. For the Okla Division, residual income is __________________.

D. For the Homa Division, residual income is __________________.

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