The North Division of the Lyman Company reported the following data for last year: The residual income for the North Division last year was:
A)$130,000
B)$126,000
C)$90,000
D)$70,000

Question

The North Division of the Lyman Company reported the following data for last year:  The residual income for the North Division last year was:
A)$130,000 
B)$126,000 
C)$90,000 
D)$70,000

Quizplus · Accepted Answer

Residual income = Net operating income - (Average operating assets × Minimum required rate of return)
= $200,000 - ($500,000 × 14%)= $130,000

The North Division of the Lyman Company Reported the Following