5 ITIE 3 Question 1 - 11 marks 4 Q1. Financial data for Summerland Company for last year appear below: 6 7 Summer and Company 8 Statements of Financial Position 9 10 Beginning Balance 11 Assets: 12 Cash $50,000 $72,000 13 Accounts receivable 20.000 26,000 14 Inventory 30,000 36,000 15 Plant and equipment (net) 120,000 112,000 16 Investment in ABC Company 80,000 100,000 17 Land (underdeveloped) 170,000 170,000 18 Total assets $470.000 $510.000 19 20 Liabilities and owners' equity: 21 Accounts payable $70,000 $90,000 22 Long-term deby 250,000 250,000 23 Owners' equity 150.000 170,000 TOTT Trantre's and owners 24 $470.000 $510.000 25 26 Summerland Company 27 Income Statement 28 Sales S414.0001 29 Less operating expenses 351.900 SECTION 2 SECTION 3 Instructions SECTION 4 SECTION 5 SECTION 6 FC 1 11 D 23 Owners'equity 150.000 170.000 TOTS Owens 24 $470.000 5510.000 25 26 Summerland Company 27 Income Statement 28 Sales 5414,000 Less operating expenses 351.900 30 Net operating income 62.100 Tess interest and taxes: 12 Interest expense $30.000 33 Tax expense 10.000 40.000 34 Operating Income 522100 15 36 The company paid dividends of $2,100 last year. The "Investment in ABC Company" on the statement of financial position 37 represents an investment in the stock of another company 39 Required: 10 1) Compute the company's Avergage Operating Assets (AOA) for last year: (3 marks) 92 3 Show anyall workings in here: 4 Average Operating Assets 5 b) Compute the company's Margin for last year: (2 marks) Margin IN SECTION SECTION 4 SECTIONS SECTION FORMULA SHI+ KE u 6 Overine Copy - Insert Morge DeleteRow Hem Conditional Formats CLICK HERE TO SAVE YOUR WORK ATO D G H Show anylall workings in here: A 31 39 Required: 40 a) Compute the company's Avergage Operating Assets (AOA) for last year: (3 marks) 42 43 44 45 Average Operating Assets 46 47 b) Compute the company's Margin for last year: (2 marks) 49 SO Si Margin 52 53 c) Compute the company's Turnover for last year: (2 marks) 54 55 56 57 Turnover 58 59 d) Compute the company's Return on Investment (RON) for last year: (2 marks) 0 51 2 3 ROI c) The Board of Directors of the Company have set a minimum required return of 20%. marks) CLICK HERE TO SAVE YOUR WORK A10 G 54 55 56 Turnover 58 59 ) Compute the company's Return on Investment (ROI) for last year: (2 marks) 60 61 62 63 ROI 64 65 e) The Board of Directors of the Company have set a minimum required return of 20%. 66 What was the company's residual income last year? (2 marks) 67 68 69 70 Residual income 71