Financial data for Joel de Paris, Inc., for last year follow:   Joel de Paris, Inc. Balance Sheet   Beginning Balance   Ending Balance Assets Cash $ 127,000   $ 138,000   Accounts receivable   334,000     472,000   Inventory   568,000     484,000   Plant and equipment, net   851,000     826,000   Investment in Buisson, S.A.   399,000     429,000   Land (undeveloped)   249,000     254,000   Total assets $ 2,528,000   $ 2,603,000   Liabilities and Stockholders' Equity Accounts payable $ 379,000   $ 345,000   Long-term debt   1,016,000     1,016,000   Stockholders' equity   1,133,000     1,242,000   Total liabilities and stockholders' equity $ 2,528,000   $ 2,603,000       Joel de Paris, Inc. Income Statement   Sales         $ 5,320,000   Operating expenses           4,628,400   Net operating income           691,600   Interest and taxes:               Interest expense $ 125,000           Tax expense   201,000       326,000   Net income         $ 365,600       The company paid dividends of $256,600 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?               1. Average operating assets     2. Margin   %   Turnover       ROI   % 3. Residual income

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Financial data for Joel de Paris, Inc., for last year follow:

 

Joel de Paris, Inc.
Balance Sheet
  Beginning
Balance
  Ending
Balance
Assets
Cash $ 127,000   $ 138,000  
Accounts receivable   334,000     472,000  
Inventory   568,000     484,000  
Plant and equipment, net   851,000     826,000  
Investment in Buisson, S.A.   399,000     429,000  
Land (undeveloped)   249,000     254,000  
Total assets $ 2,528,000   $ 2,603,000  
Liabilities and Stockholders' Equity
Accounts payable $ 379,000   $ 345,000  
Long-term debt   1,016,000     1,016,000  
Stockholders' equity   1,133,000     1,242,000  
Total liabilities and stockholders' equity $ 2,528,000   $ 2,603,000  
 


 

Joel de Paris, Inc.
Income Statement
 
Sales         $ 5,320,000  
Operating expenses           4,628,400  
Net operating income           691,600  
Interest and taxes:              
Interest expense $ 125,000          
Tax expense   201,000       326,000  
Net income         $ 365,600  
   


The company paid dividends of $256,600 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?

 

 
 
       
1. Average operating assets    
2. Margin   %
  Turnover    
  ROI   %
3. Residual income
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