The Information Below Is Provided by the Talbot Cleaning Supply

question 34

Multiple Choice

The information below is provided by the Talbot Cleaning Supply Company:
$\begin{array} { l r } \text { Sales } & \$ 200,000 \\\text { Operating profit } & 14,000 \\\text { Average operating assets } & 80,000 \\\text { Equity } & 50,000 \\\text { Minimum required rate of return } & 12 \%\end{array}$
Calculate residual profit.

• A)$8,000
• B)$4,400
• C)$5,000
• D)$4,000

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Definitions:

Ending Balance Sheet

A financial statement showing a company's assets, liabilities, and equity at the final moments of an accounting period.

Bill And Hold Sales

Transactions where revenue is recognized after billing the customer while the seller retains physical possession of the goods.

Shipments

The transportation of goods from one location to another.

Distributors

Entities involved in the process of making products available for consumption by distributing them from producers to end consumers.