Required information [The following information applies to the questions displayed below.] The following information relates to a company's operations for last year. $ 1,300,000 440,000 860,000 600,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income 260,000 Average operating assets $4 812,500 The company's minimum required rate of return is 15%. 4. Calculate last year's residual income. Residual income

Required information [The following information applies to the questions displayed below.] The following information relates to a company's operations for last year. $ 1,300,000 440,000 860,000 600,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income 260,000 Average operating assets $4 812,500 The company's minimum required rate of return is 15%. 4. Calculate last year's residual income. Residual income

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Description: Required information[The following information applies to the questions displayed below.]The following information relates to a company's operations for last year.Sales$ 1,300,000Variable expenses440,000Contribution marginFixed expenses860,000600,00

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 4BE: Profit margin, investment turnover, and ROI Briggs Company has operating income of 36,000, invested...

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Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: At the beginning of last year, Elway had 28,300,000 in operating assets. At the end of the year, Elway had 23,700,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin and turnover ratios for last year. (Note: Round the answer for margin ratio to two decimal places.) 3. Compute ROI. (Note: Round answer to two decimal places.) 4. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI. 5. CONCEPTUAL CONNECTION Comment on why the ROI for Elway Company is relatively high (as compared to the lower ROI of a typical manufacturing company).
Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated Balance Sheet Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income $ 121,000 207,000 $4,416,000 3,665,280 750,720 328,000 $ 422,720 Beginning Balance $ 136,000 339,000 568,000 857,000 395,000 251,000 $ 2,546,000 Ending Balance $ 131,000 479,000 488,000 842,000 435,000 253,000 $ 2,628,000 $ 349,000 $ 374,000 983,000 1,189,000 983,000 1,296,000 $ 2,546,000 $ 2,628,000 The company paid dividends of $315,720 last year. The “Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company. The…
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Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales next year will be $1.68 million. Interest expense is expected to remain unchanged at $35,000,and the firm plans to pay $74,000 in cash dividends. Metroline Manufacturing's income statement for the previous year is given along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the percent-of-sales method to prepare a pro forma income statement for next year. b. Use fixed and variable cost data to develop a pro forma income statement for next year. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of income? Explain why.
Balance Sheet Beginning Balance Ending Balance Assets $ 131,000 334,000 579,000 786,000 401,000 255,000 $ 2,486,000 $ 126,000 480,000 483,000 781,000 435,000 251,000 $ 2,556,000 Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity $381,000 1,020,000 1,085,000 $ 2,486,000 $ 347,000 1,020,000 1,189,000 $ 2,556,000 Total liabilities and stockholders' equity Joel de Paris, Incorporated Income Statement $ 4,255,000 3,489,100 765,900 Sales Operating expenses Net operating income Interest and taxes: $ 116,000 199,000 Interest expense Тах еxpense 315,000 $ 450,900 Net income The company paid dividends of $346,900 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%.