Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) $ 138,000 $ 133,000 335,000 567,000 810,000 405,000 254,000 $ 2,509,000 479,000 485,000 793,000 432,000 249,000 $ 2,571,000 Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity 24 377,000 983,000 1,149,000 $ 2,509,000 24 349,000 983,000 1,239,000 $ 2,571,000 Total liabilities and stockholders' equity Joel de Paris, Inc. Income Statement $ 4,675,000 4,114,000 561,000 Sales Operating expenses Net operating income Interest and taxes: Interest expense Тах expense $ 117,000 205,000 322,000 Net income $ 239,000 The company paid dividends of $149,000 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%.
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) $ 138,000 $ 133,000 335,000 567,000 810,000 405,000 254,000 $ 2,509,000 479,000 485,000 793,000 432,000 249,000 $ 2,571,000 Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity 24 377,000 983,000 1,149,000 $ 2,509,000 24 349,000 983,000 1,239,000 $ 2,571,000 Total liabilities and stockholders' equity Joel de Paris, Inc. Income Statement $ 4,675,000 4,114,000 561,000 Sales Operating expenses Net operating income Interest and taxes: Interest expense Тах expense $ 117,000 205,000 322,000 Net income $ 239,000 The company paid dividends of $149,000 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%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
CH11_HW_QA1_LA
Transcribed Image Text:Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Ending
Balance
Balance
Assets
138,000
335,000
567,000
810,000
405,000
254,000
$ 2,509,000
Cash
133,000
479,000
485,000
793,000
432,000
249,000
$ 2,571,000
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
24
377,000
983,000
1,149,000
$ 2,509,000
349,000
983,000
1,239,000
$ 2,571,000
Total liabilities and stockholders' equity
Joel de Paris, Inc.
Income Statement
$ 4,675,000
4,114,000
561,000
Sales
Operating expenses
Net operating income
Interest and taxes:
$ 117,000
205,000
Interest expense
Тах expense
322,000
Net income
239,000
The company paid dividends of $149,000 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%.
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?
Average operating assets
Margin
Turnover
1.
2.
%
ROI
%
3.
Residual income
Expert Solution
Step 1 Introduction
The operating assets of the business do not include the investment in other companies or any undeveloped fixed assets.
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