Residual Income

Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results:

Adams DivisionJefferson DivisionNet (after-tax) income$617,100$362,250Total capital employed4,240,0003,640,000

In addition, Washington Company's top management has set a minimum acceptable rate of return equal to 7%.

Required:

Enter negative values as negative numbers.

1.Calculate the residual income for the Adams Division.

$

2.Calculate the residual income for the Jefferson Division.