Problem 15-23 Comparing return on investment and residual income LO 15-6, 15-7

Cole Corporation operates three investment centers. The following financial statements apply to the investment center named Morrison Division.

MORRISON DIVISION Income Statement For the Year Ended December 31, 2014
Sales revenue	$	106,780
Cost of goods sold		59,175
Gross margin		47,605
Operating expenses
Selling expenses		(2,790	)
Depreciation expense		(4,205	)
Operating income		40,610
Nonoperating item
Loss of sale of land		(4,700	)
Net income	$	35,910

MORRISON DIVISION Balance Sheet As of December 31, 2014
Assets
Cash	$	12,552
Accounts receivable		40,366
Merchandise inventory		37,800
Equipment less accumulated depreciation		90,368
Nonoperating assets		9,600
Total assets	$	190,686
Liabilities
Accounts payable	$	9,537
Notes payable		68,000
Stockholders