Determine which regional managers should receive bonuses if, Ask an Expert

Accounting

Peter, Inc. is the leading food distributor in the nation. The company is organized by geographical regions and each region is treated as an investment center for evaluation purposes. The following quarterly information is available:

North......East.....South.......West
Sales..................175,000..210,000...150,000....120,000
Net Income.. 83,305.. 97,366....37,405... 29,924
Total assets... 1,000,000.1,500,000. 800,000. 1,250,000
Current liabilities. 135,000. 600,000..433,000. 850,000

Required:

1. Determine which regional managers should receive bonuses if bonuses are awarded to regional managers whose return on investment (ROI) exceeds 10%. Be sure to show all your work. (This company defines invested capital as total assets)

2. Determine which regional managers should receive bonuses if bonuses are awarded to regional managers whose return on investment (ROI) exceeds 10%. Be sure to show all your work. (this company defines invested capital as total assets minus current liabilities)

3. Determine which regional managers should receive bonuses if bonuses are awarded to regional managers whose residual income exceeds 12%. Be sure to show all your work.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9413870

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