Pine Corp. has revenues of $500,000 resulting in an operating income of $54,000. Invested assets total $600,000. Residual income is $18,000. Calculate the new residual income if sales increase by 10% and the profit margin and invested assets remain the same.
A. $0
B. $36,000
C. $23,400
D. $3,240
Answer: C
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Pants Corporation acquired 75 percent of Shirt Company's voting shares on January 1, 20X7, at underlying book value. On December 31, 20X7, it also purchased $300,000 par value 9 percent Shirt bonds, which had been issued on January 1, 20X3 to Parry Corporation (unaffiliated with either Pants or Shirt) at a $20,000 premium. The bonds were originally issued with a 10-year maturity and pay interest annually on December 31. During preparation of the consolidated financial statements for December 31, 20X7, the following consolidation entry was included in the consolidation worksheet: Bonds Payable300,000 Bond Premium11,902 Loss on Bond Retirement12,098 Investment in Shirt Company Bonds 324,000Based on the information given above, what price did Pants pay to purchase the Shirt bonds?
A. $311,902 B. $300,000 C. $324,000 D. $312,098
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The right side of an account is called the debit side.
Answer the following statement true (T) or false (F)