Answer: $193,000
Explanation:
Given that,
Average total assets = $4,100,000
Sales = $4,525,000
Cost of goods sold = $2,550,000
Operating expenses = $1,372,000
Target income = 10% of average invested assets
Net operating income = Sales - Cost of goods sold - Operating expenses
= $4,525,000 - $2,550,000 - $1,372,000
= $603,000
Minimum required return on assets = 10%
Residual income:
= Net operating income - (Minimum required return on assets × Average total assets)
= $603,000 - (10% × $4,100,000)
= $193,000
