FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Financial data for Beaker Company for last year appear below:
Beaker Company
Statements of Financial Position
Assets:
Cash
Accounts receivable
Inventory
Plant and equipment (net)
Investment in Cedar Company
Land (undeveloped)
Total assets
Liabilities and owners' equity:
Accounts payable
Long-term debt
Owners' equity
Total liabilities and owners' equity
Beaker Company
Income Statement
Sales
Less operating expenses
Net operating income
Less interest and taxes:
Interest expense
Tax expense
Net income
$ 2,440,000
2,074,000
366,000
$ 102,000
139,080
241,080
$ 124,920
Beginning Balance
Ending Balance
$ 273,000
191,000
$ 336,920
313,000
438,000
255,000
305,000
$ 1,775,000
$ 192,000
839,000
744,000
200,000
251,000
398,000
277,000
305,000
$ 1,767,920
$ 171,000
839,000
757,920
$ 1,775,000
$ 1,767,920
The company paid dividends of $111,000 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 26%. What was the company's residual Income last
year?
Complete this question by entering your answers in the tabs below.
Required A Required B
Compute the company's margin, turnover, and return on investment for last year. (Round your "Percentage" answers to 2
decimal places.)
Margin
%
Turnover
Return on investment
%
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Transcribed Image Text:Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Assets: Cash Accounts receivable Inventory Plant and equipment (net) Investment in Cedar Company Land (undeveloped) Total assets Liabilities and owners' equity: Accounts payable Long-term debt Owners' equity Total liabilities and owners' equity Beaker Company Income Statement Sales Less operating expenses Net operating income Less interest and taxes: Interest expense Tax expense Net income $ 2,440,000 2,074,000 366,000 $ 102,000 139,080 241,080 $ 124,920 Beginning Balance Ending Balance $ 273,000 191,000 $ 336,920 313,000 438,000 255,000 305,000 $ 1,775,000 $ 192,000 839,000 744,000 200,000 251,000 398,000 277,000 305,000 $ 1,767,920 $ 171,000 839,000 757,920 $ 1,775,000 $ 1,767,920 The company paid dividends of $111,000 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 26%. What was the company's residual Income last year? Complete this question by entering your answers in the tabs below. Required A Required B Compute the company's margin, turnover, and return on investment for last year. (Round your "Percentage" answers to 2 decimal places.) Margin % Turnover Return on investment %
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