Question: East Mullett Manufacturing earned operating income last year as shown in the following income statement:
At the beginning of the year, the value of operating assets was $345,000. At the end of the year, the value of operating assets was $405,000.
Calculating Residual Income Refer to the information for East Mullett Manufacturing on the previous page. East Mullett requires a minimum rate of return of 10 percent.
Required: Calculate
(1) average operating assets and
(2) residual income.