Waldon Corporation's balance sheet shows that the company has $600,000 invested in operating assets. During 2014, Waldon

Question:

Waldon Corporation's balance sheet shows that the company has $600,000 invested in operating assets. During 2014, Waldon earned $120,000 on $960,000 of sales. The company's desired return on investment (ROI) is 12 percent.

Required

a. Construct a spreadsheet to calculate ROI and residual income using these data. Build the spreadsheet using formulas so that the spreadsheet could be used as a template for any ROI or residual income problem. The following screen capture shows how to construct the template.

Waldon Corporation's balance sheet shows that the company has $600,000

Spreadsheet Tips
(1) The cells below row 12 that show numbers should all be based on formulas. This allows the results to be automatically recalculated based on changes in the data in rows 3 to 6.
(2) The parentheses in columns F and J have been entered as text in columns that have a column width of 1.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...