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Natasha_Volkova [10]
3 years ago
13

Calculating Residual Income East Mullett Manufacturing earned operating income last year as shown in the following income statem

ent: Sales $531,250 Cost of goods sold 280,000 Gross margin $251,250 Selling and administrative expense 184,500 Operating income $66,750 Less: Income taxes (@ 40%) 26,700 Net income $40,050 At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000. East Mullett requires a minimum rate of return of 10%. Required: For East Mullett, calculate: 1. Average operating assets $ 2. Residual income $
Business
1 answer:
oee [108]3 years ago
5 0

Answer:

1. $425,000

2. $24,250

Explanation:

The computations are shown below:

1. For Average Operating Assets  

Average operating assets = (Beginning Operating Assets + Ending Operating Assets) ÷ 2

= ($390,000 + $460,000) ÷ 2

= $425,000

2. Residual income =  Operating income - (Average operating assets × Minimum Required Rate of Return)

= $66,750 - ($425,000 × 10%)

= $66,750 - $42,500

= $24,250

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Answer:

C) There will be an increase in government purchases as the economy has more income.

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Every time an economy (or even a company) experiences a significant technological progress, its productivity increases, increasing the total output.

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On January 1, 2019, Upward Company purchased a copy machine. The machine costs $320,000, its estimated useful life is 8 years, a
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Answer:

$60,000

Explanation:

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3 years ago
Consider the following account balances (in thousands) for the Peterson Company.
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Answer:

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Explanation:

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Schedule for the cost of goods manufactured

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<u>Less Ending Inventory                                     (23000)</u>

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Add Direct Labor                                               22,000

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Indirect Manufacturing Labor     17,000

Plant Insurance                           7,000

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