Calculating Residual IncomeEast Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales $531,250 Cost of goods sold 280,000 Gross margin $251,250 Selling and administrative expense 181,700 Operating income $69,550 Less: Income taxes (@ 40%) 27,820 Net income $41,730 At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000. East Mullett requires a minimum rate of return of 10%. Required:For East Mullett, calculate: 1. Average operating assets $fill in the blank 1 2. Residual income $fill in the blank 2

Calculating Residual Income East Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales $531,250 Cost of goods sold 280,000 Gross margin $251,250...

Calculating Residual Income

East Mullett Manufacturing earned operating income last year as shown in the following income statement:

Sales	$531,250
Cost of goods sold	280,000
Gross margin	$251,250
Selling and administrative expense	181,700
Operating income	$69,550
Less: Income taxes (@ 40%)	27,820
Net income	$41,730

At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000. East Mullett requires a minimum rate of return of 10%.

Required:

For East Mullett, calculate:

1. Average operating assets	$fill in the blank 1
2. Residual income	$fill in the blank 2

Jun 11, 2022

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Calculating Residual Income East Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales $531,250 Cost of goods sold 280,000 Gross margin $251,250...

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