- Residual IncomeWashington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year’s results:
Adams Division Jefferson Division Net (after-tax) income $701,800 $340,200 Total capital employed 4,440,000 3,412,500
In addition, Washington Company’s top management has set a minimum acceptable rate of return equal to 9%.Required:Enter negative values as negative numbers.1. Calculate the residual income for the Adams Division.
$2. Calculate the residual income for the Jefferson Division.$