The company paid dividends of $154,000 last year. The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company.

Required:

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

b. The Board of Directors of Beaker Company has set a minimum required return of 30%. What was the company's residual income last year?

Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash Accounts receivable Inventory Plant and equipment (net) Investment in Cedar Company Land (undeveloped) Total assets $290,000 209,000 282,000 430,000 304,000 241,000 $1,756,000 $ 451,280 193,000 232,000 393,000 255,000 241.000 $1,765,280 Liabilities and owners' equity: Accounts payable Long-term debt Owners' equity Total liabilities and owners' equity $208,000 824,000 724,000 $1,756,000 $ 175,000 824,000 766,280 $1,765,280 Beaker Company Income Statement Sales Less operating expenses Net operating income Less interest and taxes: $1,960,000 1,519,000 441,000 $103,600 141,120 Interest expense 244,720 $ 196,280 Tax expense Net income