Joseph Company Reported the Following Information for the Current Year

question 37

Multiple Choice

Joseph Company reported the following information for the current year: The company's operating income was:
$$\begin{array} { |l | r| } \hline\text { Sales } & \$ 787,000 \\\hline \text { Average Operating Assets } & \$ 375,000 \\\hline \text { Desired ROI } & 12 \% \\\hline\text { Residual Income } & \$ 11,250 \\\hline\end{array}$$

• A)$94,440.
• B)$56,250.
• C)$45,000.
• D)$33,750.

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Definitions:

Patents

Exclusive rights to produce and sell goods with one or more unique features.

Net Income

The total profit or loss a company generates from its operations over a specific period after all expenses have been subtracted from revenues.

Operating Activities

The element of a company's cash flow statement that represents the cash flow from regular business operations.

Gain

An increase in wealth or resources, typically recognized when assets are sold for more than their carrying amount.