Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated 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 Balance Sheet Beginning Balance $ 138,000 338,000 Ending Balance $ 128,000 477,000 567,000 807,000 410,000 482,000 803,000 434,000 252,000 248,000 $ 2,508,000 $ 389,000 1,032,000 1,087,000 $ 2,576,000 $ 343,000 1,032,000 1,201,000 Total liabilities and stockholders' equity $ 2,508,000 $ 2,576,000 Joel de Paris, Incorporated Income Statement Sales Operating expenses Interest and taxes: Net operating income Interest expense Tax expense Net income $ 119,000 196,000 $ 4,114,000 3,579,180 534,820 315,000 $ 219,820 The company paid dividends of $105,820 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 2. Turnover 2. ROI 3. Residual income % %
Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated 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 Balance Sheet Beginning Balance $ 138,000 338,000 Ending Balance $ 128,000 477,000 567,000 807,000 410,000 482,000 803,000 434,000 252,000 248,000 $ 2,508,000 $ 389,000 1,032,000 1,087,000 $ 2,576,000 $ 343,000 1,032,000 1,201,000 Total liabilities and stockholders' equity $ 2,508,000 $ 2,576,000 Joel de Paris, Incorporated Income Statement Sales Operating expenses Interest and taxes: Net operating income Interest expense Tax expense Net income $ 119,000 196,000 $ 4,114,000 3,579,180 534,820 315,000 $ 219,820 The company paid dividends of $105,820 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 2. Turnover 2. ROI 3. Residual income % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Financial data for Joel de Paris, Incorporated, for last year follow:
Joel de Paris, Incorporated
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
Balance Sheet
Beginning
Balance
$ 138,000
338,000
Ending Balance
$ 128,000
477,000
567,000
807,000
410,000
482,000
803,000
434,000
252,000
248,000
$ 2,508,000
$ 389,000
1,032,000
1,087,000
$ 2,576,000
$ 343,000
1,032,000
1,201,000
Total liabilities and stockholders' equity
$ 2,508,000
$ 2,576,000
Joel de Paris, Incorporated
Income Statement
Sales
Operating expenses
Interest and taxes:
Net operating income
Interest expense
Tax expense
Net income
$ 119,000
196,000
$ 4,114,000
3,579,180
534,820
315,000
$ 219,820
The company paid dividends of $105,820 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
2. Turnover
2. ROI
3. Residual income
%
%
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