Garcia Company Reports the Following Information What Is the Residual Income for Garcia Company?
A) $30,000

question 14

Multiple Choice

Garcia Company reports the following information:
$\begin{array}{ll}\text { Net operating income after taxes } & \$ 100,000 \\\text { Before-tax operating income } & \$ 300,000 \\\text { Average invested capital } & \$ 500,000 \\\text { After-tax cost of capital } & 10 \%\end{array}$
What is the residual income for Garcia Company?

• A) $30,000
• B) $50,000
• C) $250,000
• D) $450,000

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Definitions:

Comprehensive Income

The total change in equity for a reporting period other than transactions from owners, encompassing all recognized income and expenses.

FVTOCI

An acronym for Fair Value Through Other Comprehensive Income, a classification under IFRS accounting standards for financial assets held for purposes other than trading, where changes in fair value are recognized in other comprehensive income rather than profit or loss.

Equity Method

An accounting technique used to assess the profits earned by investments in other companies, reflecting the profit in proportion to shares held.

Comprehensive Income

The total change in equity for a reporting period other than transactions from owners, encompassing all realized and unrealized gains and losses.