Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Chapter 14, Problem 14.3.3P
To determine
Concept Introduction:
DuPont analysis is an Analysis to examine the Return of Equity (ROE) of a company by various means which includes Profit margin, Asset turnover and financial leverage.
Divisional income statement shows the
Recommendation made for expansion of division
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Divisional Income Statements and Return on Investment Analysis
E.F. Lynch Company is a diversified investment company with three operating divisions organized as A decentralized unit in which the manager has the responsibility and authority to make decisions that affect not only costs and revenues but also the fixed assets invested in the center.investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows:
Mutual FundDivision
ElectronicBrokerageDivision
InvestmentBankingDivision
Fee revenue
$2,510,000
$2,630,000
$2,510,000
Operating expenses
1,350,800
1,105,400
1,898,000
Invested assets
9,200,000
7,700,000
5,100,000
The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.
Required:
1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.…
Divisional income statements and return on investment analysis
E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data
taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows:
Fee revenue
Operating
expenses
Invested
assets
Required:
Electronic
Investment
Mutual Fund Brokerage
Banking
Division
Division
Division
$1,090,000 $1,130,000 $1,080,000
586,000
4,000,000 3,300,000
The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.
Line Item Description
Fee revenue
Operating expenses
Operating income
Division
1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.
E.F. Lynch Company
Divisional Income Statements
For the Year Ended June 30, 20Y8
476,600
Mutual Fund Division
Electronic Brokerage
Division
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Check My Work
1. For…
Divisional Income Statements and Return on Investment Analysis
E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows:
Mutual FundDivision
ElectronicBrokerageDivision
InvestmentBankingDivision
Fee revenue
$1,090,000
$1,160,000
$1,080,000
Operating expenses
530,000
486,800
763,200
Invested assets
4,000,000
3,400,000
2,200,000
The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.
Required:
1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.
E.F. Lynch Company
Divisional Income Statements
For the Year Ended June 30, 20Y8
MutualFundDivision
ElectronicBrokerageDivision
InvestmentBankingDivision
Fee revenue
$
$
$…
Chapter 14 Solutions
Survey of Accounting (Accounting I)
Ch. 14 - When the manager has the responsibility and...Ch. 14 - The Accounts Payable Department has expenses of...Ch. 14 - Division A of Kern Co. has sales of $350,000, cost...Ch. 14 - Division L of Liddy Co. has a return on investment...Ch. 14 - Which approach to transfer pricing uses the price...Ch. 14 - Prob. 1CDQCh. 14 - Prob. 2CDQCh. 14 - Prob. 3CDQCh. 14 - Prob. 4CDQCh. 14 - Weyerhaeuser developed a system that assigns...
Ch. 14 - What is the major shortcoming of using operating...Ch. 14 - Prob. 7CDQCh. 14 - In a decentralized company in which the divisions...Ch. 14 - Prob. 9CDQCh. 14 - Prob. 10CDQCh. 14 - Prob. 11CDQCh. 14 - Prob. 12CDQCh. 14 - Why would standard cost be a more appropriate...Ch. 14 - Prob. 14CDQCh. 14 - Budget performance reports for cost centers...Ch. 14 - Divisional income statements The following data...Ch. 14 - Prob. 14.3ECh. 14 - Prob. 14.4ECh. 14 - Service department charges In divisional income...Ch. 14 - Service department charges and activity bases...Ch. 14 - Divisional income statements with service...Ch. 14 - Corrections to service department charges Panda...Ch. 14 - Profit center responsibility reporting On-Demand...Ch. 14 - Prob. 14.10ECh. 14 - Prob. 14.11ECh. 14 - Prob. 14.12ECh. 14 - Profit margin, investment turnover, and return on...Ch. 14 - Prob. 14.14ECh. 14 - Determining missing items in return on investment...Ch. 14 - Prob. 14.16ECh. 14 - Prob. 14.17ECh. 14 - Prob. 14.18ECh. 14 - Budget performance report for a cost center Sneed...Ch. 14 - Budget performance report for a cost center Sneed...Ch. 14 - Profit center responsibility reporting A-One...Ch. 14 - Profit center responsibility reporting A-One...Ch. 14 - Profit center responsibility reporting A-One...Ch. 14 - Prob. 14.3.1PCh. 14 - Divisional income statements and return on...Ch. 14 - Prob. 14.3.3PCh. 14 - Prob. 14.4.1PCh. 14 - Prob. 14.4.2PCh. 14 - Prob. 14.4.3PCh. 14 - Effect of proposals on divisional performance A...Ch. 14 - Prob. 14.4.5PCh. 14 - Prob. 14.5.1PCh. 14 - Prob. 14.5.2PCh. 14 - Prob. 14.5.3PCh. 14 - Prob. 14.5.4PCh. 14 - Prob. 14.6.1PCh. 14 - Prob. 14.6.2PCh. 14 - Prob. 14.6.3PCh. 14 - Prob. 14.6.4PCh. 14 - Prob. 14.6.5PCh. 14 - Balanced scorecard American Express Company (AXP)...Ch. 14 - Balanced scorecard Several years ago. United...Ch. 14 - Balanced scorecard Delta Air Lines, Inc. (DAL)...Ch. 14 - Balanced scorecard Costco Wholesale Corporation...Ch. 14 - Prob. 14.5MBACh. 14 - Prob. 14.1CCh. 14 - Prob. 14.2CCh. 14 - Prob. 14.3.1CCh. 14 - Prob. 14.3.2CCh. 14 - Prob. 14.3.3CCh. 14 - Prob. 14.3.4CCh. 14 - Prob. 14.4.1CCh. 14 - Prob. 14.4.2CCh. 14 - Prob. 14.4.3CCh. 14 - Prob. 14.4.4CCh. 14 - Prob. 14.5.1CCh. 14 - Prob. 14.5.2CCh. 14 - Prob. 14.5.3CCh. 14 - Prob. 14.5.4CCh. 14 - Prob. 14.5.5CCh. 14 - Prob. 14.5.6C
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