HWCH 24 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 Mutual Fund Division $1,260,000 680,400 4,600,000 Fee revenue Operating expenses Income from operations Electronic Brokerage Division $1,300,000 547,600 3,800,000 Division Mutual Fund Division Electronic Brokerage Division Investment Banking Division The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Mutual Electronic Investment Fund Brokerage Banking Division Division Division 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department cost allocations. Investment Banking Division $1,280,000 968,000 2,600,000 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. Round your answers to one decimal place. Profit Margin Investment Turnover ROI % 3. When faced with limited funds for expansion, management should consider an expansion of the ( Division first.
HWCH 24 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 Mutual Fund Division $1,260,000 680,400 4,600,000 Fee revenue Operating expenses Income from operations Electronic Brokerage Division $1,300,000 547,600 3,800,000 Division Mutual Fund Division Electronic Brokerage Division Investment Banking Division The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Mutual Electronic Investment Fund Brokerage Banking Division Division Division 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department cost allocations. Investment Banking Division $1,280,000 968,000 2,600,000 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. Round your answers to one decimal place. Profit Margin Investment Turnover ROI % 3. When faced with limited funds for expansion, management should consider an expansion of the ( Division first.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 14.3.1P
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AA
HWCH 24
Fee revenue
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:
Operating expenses
Invested assets
Fee revenue
Operating expenses
Income from operations
v2.cengagenow.com
Division
Mutual Fund Division
Electronic Brokerage Division
Investment Banking Division
Mutual Fund
Division
The management of E.F. Lynch Company is evaluating each division as a basis for
planning a future expansion of operations.
Required:
Check My Work
$1,260,000
680,400
4,600,000
1. Prepare condensed divisional income statements for the three divisions, assuming
that there were no service department cost allocations.
E.F. Lynch Company
Divisional Income Statements
For the Year Ended June 30, 20Y8
Assignment Score: 0.0%
く
Electronic
Brokerage
Division
$1,300,000
547,600
3,800,000
Mutual Electronic
Electronic Investment
Fund
Brokerage Banking
Division Division Division
2. Using the DuPont formula for return on investment, compute the profit margin,
investment turnover, and return on investment for each division. Round your answers
to one decimal place.
Investment
Banking
Division
$1,280,000
968,000
2,600,000
Profit Margin
all?
%
Investment Turnover
3. When faced with limited funds for expansion, management should consider an
expansion of the
Division first.
ROI
a
%
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