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 Joel de Paris, Incorporated Income Statenent Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income $ 150,000 110,000 $ 4,050,000 3,645,000 405,000 1. Average operating assets 2. Margin 2. Tumover 2. ROI 3. Residual income 260,000 $ 145,000 % Beginning Balance % $ 140,000 450,000 320,000 680,000 250,000 180,000 $ 2,020,000 $360,000 1,500,000 160,000 $ 2,020,000 The company paid dividends of $15,000 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%. Ending Balance $ 120,000 530,000 380,000 620,000 280,000 170,000 $2,100,000 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 "Turnover" to 1 decimal place.) 3. What was the company's residual income last year? $ 310,000 1,500,000 290,000 $ 2,100,000
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 Joel de Paris, Incorporated Income Statenent Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income $ 150,000 110,000 $ 4,050,000 3,645,000 405,000 1. Average operating assets 2. Margin 2. Tumover 2. ROI 3. Residual income 260,000 $ 145,000 % Beginning Balance % $ 140,000 450,000 320,000 680,000 250,000 180,000 $ 2,020,000 $360,000 1,500,000 160,000 $ 2,020,000 The company paid dividends of $15,000 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%. Ending Balance $ 120,000 530,000 380,000 620,000 280,000 170,000 $2,100,000 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 "Turnover" to 1 decimal place.) 3. What was the company's residual income last year? $ 310,000 1,500,000 290,000 $ 2,100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
Joel de Paris, Incorporated
Income Statenent
Sales
Operating expenses
Net operating income
Interest and taxes:
Interest expense
Tax expense
Net income
$ 150,000
110,000
$ 4,050,000
3,645,000
405,000
1. Average operating assets
2. Margin
2. Tumover
2. ROI
3. Residual income
260,000
$ 145,000
%
Beginning
Balance. Ending Balance
%
$ 140,000
450,000
320,000
680,000
250,000
180,000
$ 2,020,000
$360,000
1,500,000
160,000
$ 2,020,000
$ 120,000
530,000
380,000
The company paid dividends of $15,000 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%.
620,000
280,000
170,000
$ 2,100,000.
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 "Turnover" to 1 decimal place.)
3. What was the company's residual income last year?
$ 310,000
1,500,000
290,000
$ 2,100,000
M
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