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Financial data for Hunger Games Company for last year appear below: Hunger Games Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $120,700

Financial data for Hunger Games Company for last year appear below:

Hunger Games Company
Statements of Financial Position
Beginning Balance Ending Balance
Assets:
Cash $120,700 $220,000
Accounts receivable 225,000 475,000
Inventory 317,000 390,000
Plant and equipment (net) 940,000 860,000
Investment in Katniss Company 100,000 98,000
Land (undeveloped) 198,000 65,000
Total assets $1,900,700 $2,108,000
Liabilities and owners' equity:
Accounts payable $178,700 $8,000
Long-term debt 512,000 600,000
Owners' equity 1,210,000 1,500,000
Total liabilities and owners' equity $1,900,700 $2,108,000

Hunger Games Company
Income Statement
Sales $4,500,000
Less operating expenses 4,000,000
Net operating income 500,000
Less interest and taxes:
Interest expense $97,000
Tax expense 127,000 224,000
Operating Income $276,000

The "Investment in Katniss Company" on the statement of financial position represents an investment in the stock of another company. Required:

1. Compute the company's margin, turnover, and return on investment for last year.

2. The Board of Directors of Hunger Games Company have set a minimum required return of 15%. What was the company's residual income last year?

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