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 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc. |
||||||
Beginning Balance |
Ending Balance |
|||||
Assets | ||||||
Cash | $ | 127,000 | $ | 138,000 | ||
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 |
||||||
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
Required:
1. Compute the company's average operating assets for last year.
2. Compute the company’s margin, turnover, and
3. What was the company’s residual income last year?
|
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