Financial data for Beaker Company for last year appear below: Beaker CompanyStatements of Financial Position Beginning BalanceEnding BalanceAssets: Cash$ 277,000$ 136,386Accounts receivable179,000205,000Inventory257,000270,000Plant and equipment (net)476,000440,000Investment in Cedar Company255,000288,000Land (undeveloped)335,000335,000Total assets$ 1,779,000$ 1,674,386Liabilities and owners' equity: Accounts payable$ 203,000$ 152,000Long-term debt862,000862,000Owners' equity714,000660,386Total liabilities and owners' equity$ 1,779,000$ 1,674,386 Beaker CompanyIncome StatementSales $ 1,960,000Less operating expenses 1,597,400Net operating income 362,600Less interest and taxes: Interest expense$ 105,800 Tax expense141,414247,214Net income $ 115,386 The company paid dividends of $169,000 last year. The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company. Required:a. Compute the company's margin, turnover, and return on investment for last year.b. The Board of Directors of Beaker Company has set a minimum required return of 30%. What was the company's residual income last year?

The amount of income with the customer that is the residual income will increase Residual income…

Answered: data for Beaker Company for last year…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 50E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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Financial data for Beaker Company for last year appear below:

	Beginning Balance	Ending Balance
Beaker Company
Statements of Financial Position
Assets:
Cash	$ 277,000	$ 136,386
Accounts receivable	179,000	205,000
Inventory	257,000	270,000
Plant and equipment (net)	476,000	440,000
Investment in Cedar Company	255,000	288,000
Land (undeveloped)	335,000	335,000
Total assets	$ 1,779,000	$ 1,674,386
Liabilities and owners' equity:
Accounts payable	$ 203,000	$ 152,000
Long-term debt	862,000	862,000
Owners' equity	714,000	660,386
Total liabilities and owners' equity	$ 1,779,000	$ 1,674,386

Beaker Company
Income Statement
Sales		$ 1,960,000
Less operating expenses		1,597,400
Net operating income		362,600
Less interest and taxes:
Interest expense	$ 105,800
Tax expense	141,414	247,214
Net income		$ 115,386

The company paid dividends of $169,000 last year. The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company.

Required:

a. Compute the company's margin, turnover, and return on investment for last year.

b. The Board of Directors of Beaker Company has set a minimum required return of 30%. What was the company's residual income last year?

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