Calculating Residual Income Pelican Manufacturing earned operating income last year as shown in the following income statement: Sales Cost of goods sold Gross margin Selling and administrative expense Operating income Less: Income taxes (@40%) Net income Required: For Pelican, calculate: $531,250 280,000 $251,250 1. Average operating assets $ 2. Residual income 184,700 $66,550 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. Pelican requires a minimum rate of return of 10%. 26,620 $39,930 ?

Calculating Residual Income Pelican Manufacturing earned operating income last year as shown in the following income statement: 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. Pelican requires a minimum rate of return of 10%. Required: For Pelican, calculate: 1. Average operating assets 1 2. Residual income 5