Financial Data for Bingham Company for Last Year Appear Below

Essay

Financial data for Bingham Company for last year appear below:
Bingham Company
Statements of Financial Position

$\begin{array}{|l|r|r|}\hline & \text { Beginning Balance } & \text { Ending Balance } \\\hline \text { Assets: } & & \\\hline \text { Cash } & \$ 135,000 & \$ 266,000 \\\hline \text { Accounts receivable } & 225,000 & 475,000 \\\hline \text { Inventory } & 314,000 & 394,000 \\\hline \text { Plant and equipment (net) } & 940,000 & 860,000 \\\hline \text { Investment in Carr Company } & 104,000 & 101,000 \\\hline \text { Land (undeveloped) } & \underline{198,000} & \underline{65,000} \\\hline \text { Total assets } & \$ 1,916,000 & \$ 2,161,000 \\\hline & & \\\hline \text { Liabilities and owners' equity: } & & \\\hline \text { Accounts payable } & \$ 88,000 & \$ 119,000 \\\hline \text { Long-term debt } & 585,000 & 665,000 \\\hline \text { Owners' equity } & 1,243,000 & 1,377,000 \\\hline \text { Total liabilities and owners' equity } & \$ 1,916,000 & \$ 2,161,000 \\\hline\end{array}$

Bingham Company
Income Statement

$\begin{array}{|l|r|r|}\hline \text { Sales } & & \$ 4,644,000 \\\hline \text { Less operating expenses } & & \underline{4,291,000} \\\hline \text { Net operating income } & & 353,000 \\\hline \text { Less interest and taxes: } & & \\\hline \text { Interest expense } & \$ 90,000 & \\\hline \text { Tax expense } & \underline{129,000} & \underline{219,000} \\\hline \text { Operating Income } & & \$ 134,000 \\\hline\end{array}$

The "Investment in Carr 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 have set a minimum required return of 15%.What was the company's residual income last year?