Residual Income

The income from operations and the amount of invested assets in each division of Shiner Industries are as follows:

	Income from Operations		Invested Assets
Retail Division	$99,000		$550,000
Commercial Division	150,000		750,000
Internet Division	53,300		410,000

Assume that management has established an 12% minimum acceptable return for invested assets.

a. Determine the residual income for each division.

	Retail Division			Commercial Division			Internet Division
Income from operations	$99,000			$150,000			$53,300
Minimum amount of income from operations	fill in the blank 1			fill in the blank 2			fill in the blank 3
Residual income	$fill in the blank 4			$fill in the blank 5			$fill in the blank 6

b. Which division has the most residual income?

Commercial DivisionRetail DivisionInternet Division