The Following Information Is Reported for the Current Year for North

question 59

Multiple Choice

The following information is reported for the current year for North Atlantic Division of XT Enterprises: $$\begin{array} { l r } \text { Sales } & \$ 3,800,000 \\\text { Interest expense } & \$ 250,000 \\\text { Net income } & \$ 500,000 \\\text { Total assets } & \$ 5,000,000 \\\text { Noninterest-bearing current liabilities } & \$ 400,000 \\\text { Cost of capital } & 8 \% \\\text { Required rate of return } & 14 \% \\\text { Tax rate } & 30 \%\end{array}$$ How much is the division's residual income?

• A)$31,000
• B)$275,000
• C)$644,000
• D)$307,000

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Definitions:

Entering Information

The process of inputting data into a system or document.

QuickBooks

Accounting software developed by Intuit, widely used by small and medium-sized businesses for finance management.

QuickBooks Transactions

Financial operations such as sales, purchases, and payments recorded and tracked within QuickBooks software.

Non-posting Accounts

Non-posting accounts are accounts used in an accounting system that are not directly affected or updated into the general ledger, often used for tracking purposes only.