Question

Financial data for Beaker Company for last year appear below. RADNO Inc. Statements of Financial Position Beginning Balance Ending Balance Assets: Cash Accounts receivable Inventory Plant and equipment (net) Investment in Cedar Company Land (underdeveloped) Total assets $50,000 20,000 30.000 120,000 80.000 120.000 S470.000 $70,000 25,000 35,000 110,000 100.000 170.000 $510.000 Liabilities and owners' equity: Accounts payable Long-term deby Owners' equity Total liabilities and owners' equity $70,000 250,000 150.000 $470.000 $90,000 250,000 120.000 3510.000 Besker Company Income Statement Sa.es 5414,000 Less operating expenses 351.200 Net operating income 62,100 Less interest and taxes: Interest expense $30.000 Tax expense 10.000 40.000 Operating Income $22.100 Page Break The company paid dividends of $2.100 last year. The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company Required 2) Compute the company's margin, tumover, and return on investment for last year b) The Board of Directors of Rag po Inc's have set a minimum required retum of 20% What ties the company's residual income last year? Header

Answer 1

boy $220000 $470000-$30000 - $ 170000) ($ 510000 - $100000 $170000) anets $24oooo 1) Beginning operating anets Ending operating Average operating and $ 230000 ( $220000+$ 240000 2 A) Margin= Net operating Income / sales 157. $62100) 414000 Turnover Sales / Average operating anets 1.8 = $414000 / $230000 of Turnover 15181-8= 27% ROIZ Margina $ 62100 $46000 C20yr $230000) B) Net operating Inome = Len: Min regirat Residual Income $ 16100