Question

Fon Company has the following operating data for the past year: Sales $714,000 Variable Cost $250,000...

Fon Company has the following operating data for the past year:

Sales

$714,000

Variable Cost

$250,000

Fixed Cost

$100,000

Minimum required rate of return

16%

Balance Sheet Data for beginning and end of year:

Assets

Beginning

Ending

Cash

$5,000

$5,000

Accounts Receivable

$35,000

$40,000

Inventory

$90,000

$95,000

Net PP&E

$100,000

$115,000

Land (held for future use)

$40,000

$40,000

Investments in affiliates

$5,000

$0

Total Assets

$275,000

$295,000

Liabilities & SH Equity

Short Term Debt

$22,000

$27,000

Long Term Debt

$116,000

$117,000

Stockholder's Equity

$137,000

$151,000

Total Liabilities and SH Equity

$275,000

$295,000

Q) Fon Company's residual income for the past year is closest to:

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