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DRS Sdn. Bhd. earned operating income last year as shown in the following income statement: Sales = 580000 Cost of goods sold = 333000 Gross margin = 247000 Selling and administrative expense = 190000 Operating income = 57000 At the beginning of the year, the value of operating assets was RM177,000. At the end of the year, the value of operating assets was RM277,000. DRS Sdn. Bhd. requires a minimum rate of return of 10%. a) Calculate the return on investment (ROI). b) Calculate the residual income (RI).

DRS Sdn. Bhd. earned operating income last year as shown in the following income statement: Sales = 580000 Cost of goods sold = 333000 Gross margin = 247000 Selling and administrative expense = 190000 Operating income = 57000 At the beginning of the year, the value of operating assets was RM177,000. At the end of the year, the value of operating assets was RM277,000. DRS Sdn. Bhd. requires a minimum rate of return of 10%. a) Calculate the return on investment (ROI). b) Calculate the residual income (RI).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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1. DRS Sdn. Bhd. earned operating income last year as shown in the following income statement: Sales = 580000 Cost of goods sold = 333000 Gross margin = 247000 Selling and administrative expense = 190000 Operating income = 57000 At the beginning of the year, the value of operating assets was RM177,000. At the end of the year, the value of operating assets was RM277,000. DRS Sdn. Bhd. requires a minimum rate of return of 10%. a) Calculate the return on investment (ROI). b) Calculate the residual income (RI).
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