Answer the Following Questions Using the Information Below:
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question 39

Multiple Choice

Answer the following questions using the information below:
The top management at Groundsource Company, a manufacturer of lawn and garden equipment, is attempting to recover from a fire that destroyed some of their accounting records. The main computer system was also severely damaged. The following information was salvaged:
$\begin{array}{lrrr}&\text { Tractor Division }& \text { Tiller Division }& \text {Digger Division }\\\text { Sales } & \$ 10,000,000 & (\mathrm{a}) & \$ 2,400,000 \\\text { Net operating income } & \$ 1,000,000 & \$ 1,440,000 & \$ 600,000 \\\text { Operating assets } & (\mathrm{b}) & (\mathrm{c}) & \$ 2,000,000 \\\text { Return on investment } & 0.20 & 0.10 & \text { (d) } \\\text { Return on sales } & (\mathrm{e}) & 0.12 & 0.25 \\\text { Investment turnover } & \text { (f) } & \text { (g) } & 1.2\end{array}$
-What is the value of the operating assets belonging to the Tractor Division?

• A) $ 3,500,000
• B) $4,000,000
• C) $4,500,000
• D) $5,000,000

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Definitions:

IRS

The Internal Revenue Service is an agency of the United States federal government that is tasked with collecting taxes and implementing tax legislation.

Tax Liability

The total amount of tax owed by an individual or business to federal, state, or local tax authorities.

Income Tax Formula

A mathematical equation used to calculate the amount of taxes owed to the government based on income earned, after accounting for deductions and exemptions.

Tax Liability

The total amount of tax owed to the Internal Revenue Service (IRS) or other tax authorities after applying deductions and credits.