Financial data for Redstone Company for last year appear below:

The company paid dividends of $155,000 last year. The "Investment in Balsam 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 Redstone has set a minimum required return of 40%. What was the company's residual income last year?

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Redstone Company Statements of Financial Position Beginning Ending Balance Balance Assets: Cash 331,000 S 505,256 Accounts receivable 169,000 185,000 Inventory 263,000 228,000 Plant and equipment (net) 388,000 451,000 Investment in Balsam Company 266,000 288,000 Land (undeveloped) 365,000 365,000 $ 1,845,000 $| 1,959,256 Total assets %24 Liabilities and owners' equity: Accounts payable 190,000 $ 189,000 Long-term debt 868,000 868,000 Owners' equity 787,000 902,256 Total liabilities and owners' equity $ 1,845,000 S 1,959,256