(Answered) Residual incomewashington company has two divisions the

Accounting

Residual Income

Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results:

	Adams Division	Jefferson Division
Net (after-tax) income	$ 605,000	$ 315,000
Total capital employed	4,000,000	3,250,000

In addition, Washington Company's top management has set a minimum acceptable rate of return equal to 8%.

Required:

1. Calculate the residual income for the Adams Division.

2. Calculate the residual income for the Jefferson Division.

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