Answer of Part a:
Margin = Net Operating Income / Sales * 100
Margin = $558,800 / $2,540,000 * 100
Margin = 22%
Beginning Operating Assets = Cash + Accounts Receivable +
Inventory + Plant and Equipment
Beginning Operating Assets = $284,000 + $207,000 + $307,000 +
$483,000
Beginning Operating Assets = $1,281,000
Ending Operating Assets = Cash + Accounts Receivable + Inventory
+ Plant and Equipment
Ending Operating Assets = $529,144 + $147,000 + $229,000 +
$432,000
Ending Operating Assets = $1,337,144
Average Operating Assets = (Beginning Operating Assets + Ending
Operating Assets) / 2
Average Operating Assets = ($1,281,000 + $1,337,144) / 2
Average Operating Assets = $1,309,072
Turnover = Sales / Average Operating Assets
Turnover = $2,540,000 / $1,309,072
Turnover =1.94 times
Return on Investment = Turnover * Margin
Return on Investment = 1.94 * 22%
Return on Investment = 42.68%
Answer
Residual Income = Net Operating Income – (Average Operating
Assets * Minimum Required Return)
Residual Income = $558,800 – ($1,309,072 * 38%)
Residual Income = $558,800 - $497,447.36
Residual Income = $61,352.64
Financial data for Beaker Company for last year appear below caket Company of Financial Position einning...
Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $ 290,000 $ 451,280 Accounts receivable 209,000 193,000 Inventory 282,000 232,000 Plant and equipment (net) 430,000 393,000 Investment in Cedar Company 304,000 255,000 Land (undeveloped) 241,000 241,000 Total assets $ 1,756,000 $ 1,765,280 Liabilities and owners' equity: Accounts payable $ 208,000 $ 175,000 Long-term debt 824,000 824,000 Owners' equity 724,000 766,280 Total liabilities and owners' equity $ 1,756,000...
Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Beginning Balance Inding Balance Assets: Cash Accounts receivable Inventory Plant and equipment (net) Investment in Cedar Company Land (undeveloped) Total assets $ 335,000 210,000 296,000 500,000 229.000 182.000 $1,760.000 $ 471,760 176,000 264.000 460,000 295,000 182.000 $1.848,760 Liabilities and owners' equity: Accounts payable Long-term debt Owners' equity Total liabilities and owners' equity $ 190,000 833,000 737.000 $1,760.000 $ 235,000 133,000 780,760 $1.848.760 Beaker Company...
2. Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash Accounts receivable Inventory Plant and equipment (net) Investment in Cedar Company Land (undeveloped) Total assets $ 252,000 165,000 298,000 470,000 287,000 410,000 $1,882,000 $ 197,853 189,000 236,000 445,000 311,000 410,000 $1,788,853 Liabilities and owners' equity: Accounts payable Long-term debt Owners' equity Total liabilities and owners' equity $ 227,000 860,000 795,000 $1,882,000 $ 149,000 860,000 779,853 $1,788,853 Beaker...
Financial data for Beaker Company for last year appear below: Ragano 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 80,000 170,000 $470,000 $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 $90,000 250,000 170,000 $510,000 Beaker Company Income Statement Sa;es Less...
Financial data for Beaker Company for last year appear below: Beaker Company 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 80,000 170,000 $470,000 $70,000 25,000 35,000 110,000 100,000 170,000 $510,000 $70,000 Liabilities and owners' equity: Accounts payable Long-term debt Owners' equity Total liabilities and owners' equity $90,000 250,000 250,000 150,000 $470,000 170,000 $510,000 Beaker Company Income Statement Sales $414,000...
Financial data for Beaker Company for last year appear below: Ragapo 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 80,000 170,000 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 $90,000 250,000 170.000 $510.000 Beaker Company Income Statement Sa.es Less...
Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $ 263,000 $ Accounts receivable 126,000 31,164 215,000 266,000 473,000 255,000 466,000 Inventory Plant and equipment (net) Investment in Cedar Company Land (undeveloped) 221,000 293,000 497,000 497,000 Total assets $1,828,000 $1,775,164 Liabilities and owners' equity: Accounts payable Long-term debt $ 164,000 884,000 780,000 $ 228,000 884,000 663,164 Owners' equity Total liabilities and owners' equity $1,828,000 $1,775,164 Beaker Company...
Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $ 263,000 $ 31,164 Accounts receivable 126,000 215,000 Inventory 255,000 266,000 Plant and equipment (net) 466,000 473,000 Investment in Cedar Company 221,000 293,000 Land (undeveloped) 497,000 497,000 Total assets $ 1,828,000 $ 1,775,164 Liabilities and owners' equity: Accounts payable $ 164,000 $ 228,000 Long-term debt 884,000 884,000 Owners' equity 780,000 663,164 Total liabilities and owners' equity $ 1,828,000...
Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $ 290,000 $ 451,280 Accounts receivable 209,000 193,000 Inventory 282,000 232,000 Plant and equipment (net) 430,000 393,000 Investment in Cedar Company 304,000 255,000 Land (undeveloped) 241,000 241,000 Total assets $ 1,756,000 $ 1,765,280 Liabilities and owners' equity: Accounts payable $ 208,000 $ 175,000 Long-term debt 824,000 824,000 Owners' equity 724,000 766,280 Total liabilities and owners' equity $ 1,756,000...
Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $ 263,000 $ 31,164 Accounts receivable 126,000 215,000 Inventory 255,000 266,000 Plant and equipment (net) 466,000 473,000 Investment in Cedar Company 221,000 293,000 Land (undeveloped) 497,000 497,000 Total assets $ 1,828,000 $ 1,775,164 Liabilities and owners' equity: Accounts payable $ 164,000 $ 228,000 Long-term debt 884,000 884,000 Owners' equity 780,000 663,164 Total liabilities and owners' equity $ 1,828,000...