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Stanford company is a private and its management accountant department is planning to analyze its financial performance. They collected some information on the financial statement and decided to calcula the residual income of the company to get a better picture of the profit being generated by the company. Information for analysis is provided in the table below: $ Current Assets : Cash 16,500 A/C Receivable 12,500 Inventory 30,000 Current Liabilities 34,200 Long Term Liabilities 124,300 Equity 212,000 Equipment 120,000 Property 110.000 Plant ? Interest Revenue 35000 Tax rate 30% COGS 79,500 Operating Expenses 34,200 Accumulated Depreciation - Plant 28,500 Last Year Operating Assets 285,000 Sales 116,200 Interest on debt 7.5% Government Bond rate 4% Market index @Jan 2018 27680 Market index @ Dec 31, 2018 28960 Beta 1.7 Hint : Long term assets are always sated at Net Book Value Important :All workings should be shown REQUIRED 1. Calculate Total Assets of the company using the accounting formula (A=L+E] 2. Calculate gross original cost of the plant and calculate the net book value of plant, 3. Calculate operating assets and the average OA. 4. Calculate and EBIT, interest expense, tax 5. Calculate return on equity (re) 6. Calculate Residual Income. 7. How doe the residual income differ from Accounting income (EBIT)

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