An asterisk (*) will appear to the right of an incorrect entry in the income statement and above or below
elements in the equations. The essay answer will not be graded.
1.
Road Mountain
Bike Bike
Division Division
Sales
Cost of goods sold
Gross profit
Operating expenses
Operating income
2.
Return on Investment (ROI) = Profit Margin x Investment Turnover
Sales
Road Bike Division
3.
=
ROI
=
x
Road Mountain
=
[Key code here]
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Free Ride Bike Company
Divisional Income Statements
For the Year Ended December 31, 20Y7
Return on Investment (ROI)
Key Code:
Instructions
=
ROI
Name:
Section:
0%
Score:
Operating Income
Sales
Invested Assets
x
=
x
4.
[Key essay answer here]
An asterisk (*) will appear to the right of an incorrect entry in the income statement and above or below
elements in the equations. The essay answer will not be graded.
1.
Road Mountain
Bike Bike
Division Division
Sales 1,728,000$ 1,760,000$
2.
Return on Investment (ROI) = Profit Margin x Investment Turnover
Sales
Road Bike Division
=
=
x
=
=
x
3.
Road Mountain
Bike Bike
Division Division
Operating income 172,800$ 123,200$
Name:
Solution
Section:
ON
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Score:
Instructions
Answers are entered in the cells with gray backgrounds.
For the Year Ended December 31, 20Y7
Free Ride Bike Company
Divisional Income Statements
Invested Assets
=
x
Operating Income
Sales
Return on Investment (ROI)
4.
On the basis of operating income, the Road Bike Division generated $49,600 ($172,800
– $123,200) more operating income than did the Mountain Bike Division. However,