Answer the Following Questions Using the Information Below

question 61

Multiple Choice

Answer the following questions using the information below:
Ruth Cleaning Products manufactures home cleaning products. The company has two divisions, Bleach and Cleanser. Because of different accounting methods and inflation rates, the company is considering multiple evaluation measures. The following information is provided for 20X5:
The company is currently using a 15% required rate of return.
-What are Bleach's and Cleanser's residual incomes based on book values, respectively?

• A)$116,250; $32,500
• B)$110,000; $67,500
• C)$67,500; $110,000
• D)$37,500; $116,250

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Definitions:

Permanent Accounts

Accounts that carry their ending balances over to the next fiscal year, including asset, liability, and equity accounts, foundational for understanding a company's financial health.

Balance Sheet

A financial statement that displays a company's financial position at a specific point in time, listing assets, liabilities, and equity.

Final Entries

The journal entries recorded at the end of an accounting period to prepare accounts for the next period or for the preparation of financial statements.

Temporary Accounts

Accounts used to collect information during a specific accounting period and are closed at its end, such as revenues, expenses, and dividends accounts.