Reference no: EM132516224
Financial data for Bingham Company for last year appears below:
Bingham Company Bingham Company
Statement of Financial Position Income Statement
Beginning Ending
Balance Balance
Assets: Sales $5,664,000
Cash $135,000 $266,000
Less operating expenses 4,921,000
Accounts Receivable 252,000 475,000
Operating income 743,000
Inventory 541,000 394,000
Plant and Equipment (net) 940,000 860,000
Less interest and taxes:
Investments in Carr Company 104,000 101,000
Interest expenses $90,000
Land(undeveloped) 198,000 65,000
Tax expense 129,000 219,000
Total Assets $2,170,000 $2,161,000
Net Income $524,000
Liabilities and Owners' Equity:
Accounts Payable $88,000 $119,000
Long Term Debt 585,000 665,000
Owners' Equity 1,243,000 1,377,000
Total Liabilities and Owner's Equity $1,916,000 $2,161,000
- The "Investment in Carr Company" on the statement of financial position represents an investment in the stock of another company.
Required:
Question (a) Compute the company's margin, turnover, and return on investment for last year (2 decimal points).
Question (b) The Board of Directors of Bingham Company have set a minimum required return of 15%. What was the company's residual income last year?