Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income Joel de Paris, Inc. Income Statement 1. 2. 3. $ 111,000 208,000 $ 4,032,000 3,507,840 524,160 Average operating assets Margin Turnover ROI Residual income 319,000 $ 205,160 Beginning Balance % $ % 127,000 $ 346,000 564,000 863,000 408,000 248,000 $ 2,556,000 The company paid dividends of $101,160 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%. $ Required: 1. Compute the company's average operating assets for last year. 2. Compute the company's margin, turnover, and return on investment (ROI) for last year. (Do not round intermediate calculations and round your final answers to 2 decimal places.) 3. What was the company's residual income last year? Ending Balance 137,000 490,000 484,000 829,000 426,000 252,000 $ 2,618,000 385,000 $ 343,000 992,000 1,179,000 992,000 1,283,000 $ 2,556,000 $ 2,618,000
Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income Joel de Paris, Inc. Income Statement 1. 2. 3. $ 111,000 208,000 $ 4,032,000 3,507,840 524,160 Average operating assets Margin Turnover ROI Residual income 319,000 $ 205,160 Beginning Balance % $ % 127,000 $ 346,000 564,000 863,000 408,000 248,000 $ 2,556,000 The company paid dividends of $101,160 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%. $ Required: 1. Compute the company's average operating assets for last year. 2. Compute the company's margin, turnover, and return on investment (ROI) for last year. (Do not round intermediate calculations and round your final answers to 2 decimal places.) 3. What was the company's residual income last year? Ending Balance 137,000 490,000 484,000 829,000 426,000 252,000 $ 2,618,000 385,000 $ 343,000 992,000 1,179,000 992,000 1,283,000 $ 2,556,000 $ 2,618,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2]
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc.
Balance Sheet
Assets
Cash
Accounts receivable
Inventory
Plant and equipment, net
Investment in Buisson, S.A.
Land (undeveloped)
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Long-term debt
Stockholders' equity
Total liabilities and stockholders' equity
Sales
Operating expenses
Net operating income
Interest and taxes:
Interest expense
Tax expense
Net income
Joel de Paris, Inc.
Income Statement
1.
2.
3.
$ 111,000
208,000
$ 4,032,000
3,507,840
524,160
Average operating assets
Margin
Turnover
ROI
Residual income
319,000
$ 205,160
Beginning
Balance
%
$
%
127,000 $
346,000
564,000
863,000
408,000
248,000
$ 2,556,000
The company paid dividends of $101,160 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in
the stock of another company. The company's minimum required rate of return of 15%.
$
Required:
1. Compute the company's average operating assets for last year.
2. Compute the company's margin, turnover, and return on investment (ROI) for last year. (Do not round intermediate calculations and
round your final answers to 2 decimal places.)
3. What was the company's residual income last year?
Ending
Balance
137,000
490,000
484,000
829,000
426,000
252,000
$ 2,618,000
385,000 $ 343,000
992,000
1,179,000
992,000
1,283,000
$ 2,556,000
$ 2,618,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F509e5958-8244-4a2f-8465-f7fef11461d8%2Fdc2c2538-e31f-4772-8b13-628cc3b334e4%2Fhj2q2jw_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2]
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc.
Balance Sheet
Assets
Cash
Accounts receivable
Inventory
Plant and equipment, net
Investment in Buisson, S.A.
Land (undeveloped)
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Long-term debt
Stockholders' equity
Total liabilities and stockholders' equity
Sales
Operating expenses
Net operating income
Interest and taxes:
Interest expense
Tax expense
Net income
Joel de Paris, Inc.
Income Statement
1.
2.
3.
$ 111,000
208,000
$ 4,032,000
3,507,840
524,160
Average operating assets
Margin
Turnover
ROI
Residual income
319,000
$ 205,160
Beginning
Balance
%
$
%
127,000 $
346,000
564,000
863,000
408,000
248,000
$ 2,556,000
The company paid dividends of $101,160 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in
the stock of another company. The company's minimum required rate of return of 15%.
$
Required:
1. Compute the company's average operating assets for last year.
2. Compute the company's margin, turnover, and return on investment (ROI) for last year. (Do not round intermediate calculations and
round your final answers to 2 decimal places.)
3. What was the company's residual income last year?
Ending
Balance
137,000
490,000
484,000
829,000
426,000
252,000
$ 2,618,000
385,000 $ 343,000
992,000
1,179,000
992,000
1,283,000
$ 2,556,000
$ 2,618,000
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