Thunder Sports Enterprises
The Basketball Division of Thunder Sports Enterprises reported the following financial data for the year:
$\begin{array}{ll}
\text { Assets available for use } & \$ 1,200,000 \text { Book Value } \
& \$ 1,500,000 \text { Market } V \text { alu } \
\text { Residual income } & \$ 108,000\
\text { Return on innvestment } & 14\%
\end{array}$

Refer to Thunder Sports Enterprises.What was the Basketball Division's segment income?
A)$168,000
B)$125,000
C)$269,000
D)$ 19,000

Question

Thunder Sports Enterprises
The Basketball Division of Thunder Sports Enterprises reported the following financial data for the year:
$\begin{array}{ll}
\text { Assets available for use } & \$ 1,200,000 \text { Book Value } \
& \$ 1,500,000 \text { Market } V \text { alu } \
\text { Residual income } & \$ 108,000\
\text { Return on innvestment } & 14\%
\end{array}$

Refer to Thunder Sports Enterprises.What was the Basketball Division's segment income?
A)$168,000
B)$125,000
C)$269,000
D)$ 19,000

Quizplus · Accepted Answer

The segment income can be calculated using the Return on Investment (ROI) formula, where ROI = Segment Income / Assets (at Book Value). Rearranging the formula gives Segment Income = ROI * Assets. Thus, Segment Income = 14% * $1,200,000 = $168,000.

Thunder Sports Enterprises the Basketball Division of Thunder Sports Enterprises

Thunder Sports Enterprises
the Basketball Division of Thunder Sports Enterprises