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 Beginning Balance Ending Balance $ 127,000 $ 126,000 334,000 471,000 570,000 474,000 809,000 809,000 396,000 433,000 250,000 247,000 $ 2,486,000 $2,560,000 $ 342,000 952,000 1,266,000 $2,560,000 $ 371,000 952,000 1,163,000 $ 2,486,000 Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense $112,000 194,000 $ 5,208,000 4,478,880 729,120 Tax expense Net income 306,000 $ 423,120 The company paid dividends of $320,120 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. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.) 3. What was the company's residual income last year? 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3 Residual income % %
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 Beginning Balance Ending Balance $ 127,000 $ 126,000 334,000 471,000 570,000 474,000 809,000 809,000 396,000 433,000 250,000 247,000 $ 2,486,000 $2,560,000 $ 342,000 952,000 1,266,000 $2,560,000 $ 371,000 952,000 1,163,000 $ 2,486,000 Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense $112,000 194,000 $ 5,208,000 4,478,880 729,120 Tax expense Net income 306,000 $ 423,120 The company paid dividends of $320,120 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. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.) 3. What was the company's residual income last year? 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3 Residual income % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Rahul
Transcribed Image Text:Assets
Joel de Paris, Incorporated
Balance Sheet
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
Joel de Paris, Incorporated
Income Statement
Beginning
Balance
$ 127,000
334,000
570,000
809,000
396,000
250,000
$ 2,486,000
Ending
Balance
$ 126,000
471,000
474,000
809,000
433,000
247,000
$ 371,000
952,000
1,163,000
$ 2,486,000
$ 2,560,000
$ 342,000
952,000
1,266,000
$ 2,560,000
Sales
$ 5,208,000
Operating expenses
Net operating income
4,478,880
729,120
Interest and taxes:
$ 112,000
194,000
306,000
$ 423,120
Interest expense
Tax expense
Net income
The company paid dividends of $320,120 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. (Round "Margin", "Turnover" and "ROI"
to 2 decimal places.)
3. What was the company's residual income last year?
1. Average operating assets
2. Margin
2. Turnover
2. ROI
3. Residual income
%
%
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