Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated Balance Sheet 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 Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income $ 123,000 205,000 $ 3,927,000 3,416,490 510,510 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3. Residual income 328,000 $ 182,510 Beginning Balance % $ 137,000 330,000 562,000 821,000 392,000 252,000 $ 2,494,000 % Ending Balance $ 137,000 477,000 487,000 789,000 430,000 253,000 $ 2,573,000 The company paid dividends of $61,510 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%. $ 378,000 967,000 1,149,000 $ 2,494,000 $ 2,573,000 $ 336,000 967,000 1,270,000 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. (Do not round intermediate calculations and round your final answers to 2 decimal places.) 3. What was the company's residual income last year?
Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated Balance Sheet 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 Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income $ 123,000 205,000 $ 3,927,000 3,416,490 510,510 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3. Residual income 328,000 $ 182,510 Beginning Balance % $ 137,000 330,000 562,000 821,000 392,000 252,000 $ 2,494,000 % Ending Balance $ 137,000 477,000 487,000 789,000 430,000 253,000 $ 2,573,000 The company paid dividends of $61,510 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%. $ 378,000 967,000 1,149,000 $ 2,494,000 $ 2,573,000 $ 336,000 967,000 1,270,000 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. (Do not round intermediate calculations and round your final answers to 2 decimal places.) 3. What was the company's residual income last year?
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
Balance Sheet
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 Statement
Sales
Operating expenses.
Net operating income
Interest and taxes:
Interest expense
Tax expense
Net income
$ 123,000
205,000
$ 3,927,000
3,416,490
510,510
1. Average operating assets
2. Margin
2. Turnover
2. ROI
3. Residual income
328,000
$ 182,510
Beginning
Balance
%
$ 137,000
330,000
562,000
821,000
392,000
252,000
$ 2,494,000
%
$ 378,000
967,000
1,149,000
$ 2,494,000
Ending Balance
$ 137,000
477,000
487,000
789,000
The company paid dividends of $61,510 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%.
430,000
253,000
$ 2,573,000
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. (Do not round intermediate calculations and
round your final answers to 2 decimal places.)
3. What was the company's residual income last year?
$336,000
967,000
1,270,000
$ 2,573,000
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