Chatooga Company Provided the Following Selected Information About Its Consumer $\begin{array}{lc}\text { Desired ROI } & 8 \% \\\text { Net Income } & \$ 140,000 \\\text { Residual Income } & \$ 100,000\end{array}$

question 143

Multiple Choice

Chatooga Company provided the following selected information about its consumer products division for 2012: $\begin{array}{lc}\text { Desired ROI } & 8 \% \\\text { Net Income } & \$ 140,000 \\\text { Residual Income } & \$ 100,000\end{array}$ Based on this information, the division's investment amount (amount of operating assets) was

• A) $500,000.
• B) $1,200,000.
• C) $1,240,000.
• D) $160,000.

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Definitions:

Debits

Accounting entries that increase an asset or expense account, or decrease a liability or equity account, on a company's balance sheet.

Revenue Account

An account that tracks the income generated from the sale of goods or services before any expenses are subtracted.

Asset Account

An account on a company's balance sheet that represents tangible or intangible items of value owned by the company.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account. It is positioned on the left in an accounting entry.