Sanford Company reported the following information for the current year:Sales$ 880,000Average operating assets$ 475,000Desired ROI10%Net income$ 90,000Required:Based on this information, calculate the company's residual income.
What will be an ideal response?
Residual Income = Net Income - (Average Operating Assets × Desired ROI) = $90,000 - ($475,000 × 10%) = $42,500
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Answer the following statement true (T) or false (F)
Included in Zollar Corporation's liability account balances at December 31 . 2014, were the following: 14 percent note payable issued October 1 . 2014, maturing September 30, 2015 ............. $250,000 16 percent note payable issued April 1 . 2013 . payable in six annual installments of $100,000 beginning April 1 . 2013 ................. 400,000 Zollar's December 31 . 2014, financial statements
were issued on March 31 . 2015 . On January 15, 2015, the entire $400,000 balance of the 1 . percent note was refinanced by issuance of a long-term obligation payable in a lump sum. In addition, on March 10, 2015, Zollar consummated a noncancelable agreement with the lender to refinance the 1 . percent, $250,000 note on a long-term basis, on readily determinable terms that have not yet been implemented. Both parties are financially capable of honoring the agreement, and there have been no violations of the agreement's provisions. On the December 31 . 2014, balance sheet, the amount of the notes payable that Zollar should classify as noncurrent obligations is a. $100,000. b. $250,000. c. $350,000. d. $650,000.
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Indicate whether the statement is true or false