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 Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income Beginning Balance $ 383,000 1,024,000 1,131,000 Total liabilities and stockholders' equity $ 2,538,000 $ 114,000 205,000 398,000 250,000 $ 2,538,000 $ 128,000 330,000 564,000 868,000 $ 5,348,000 4,438,840 909,160 319,000 $ 590, 160 Ending Balance $ 128,000 478,000 478,000 846,000 429,000 245,000 $2,604,000 $ 340,000 1,024,000 1,240,000 $2,604,000 The company paid dividends of $481,160 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment the stock of another company. The company's minimum required rate of return 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. Note: Round "Margin", "Turnover" and "ROI" 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 Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income Beginning Balance $ 383,000 1,024,000 1,131,000 Total liabilities and stockholders' equity $ 2,538,000 $ 114,000 205,000 398,000 250,000 $ 2,538,000 $ 128,000 330,000 564,000 868,000 $ 5,348,000 4,438,840 909,160 319,000 $ 590, 160 Ending Balance $ 128,000 478,000 478,000 846,000 429,000 245,000 $2,604,000 $ 340,000 1,024,000 1,240,000 $2,604,000 The company paid dividends of $481,160 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment the stock of another company. The company's minimum required rate of return 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. Note: Round "Margin", "Turnover" and "ROI" 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
Related questions
Question
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
$ 114,000
205,000
1. Average operating assets
2. Margin
2. Turnover
2. ROI
3. Residual income
Beginning
Balance
$ 128,000
330,000
564,000
868,000
398,000
250,000
$ 2,538,000
$ 383,000
1,024,000
1,131,000
$ 2,538,000
$ 5,348,000
4,438,840
909,160
%
319,000
$ 590,160
Ending
Balance
$ 128,000
478,000
478,000
846,000
429,000
245,000
$ 2,604,000
The company paid dividends of $481,160 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 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.
Note: Round "Margin", "Turnover" and "ROI" to 2 decimal places.
3. What was the company's residual income last year?
$ 340,000
1,024,000
1,240,000
$ 2,604,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education