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Calculating Residual Income

Pelican Manufacturing earned operating income last year as shown in the following income statement:

Sales	$531,250
Cost of goods sold	280,000
Gross margin	$251,250
Selling and administrative expense	189,600
Operating income	$61,650
Less: Income taxes (@ 40%)	24,660
Net income	$36,990

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%.

For Pelican, calculate:

1. Average operating assets	$ fill in the blank
2. Residual income	$ fill in the blank