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 Beginning Balance Ending Balance $ 126,000 484,000 475,000 $ 126,000 340,000 572,000 822,000 815,000 406,000 434,000 247,000 251,000 $ 2,513,000 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 Sales Joel de Paris, Incorporated Income Statement Operating expenses Net operating income Interest and taxes: Tax expense Interest expense Net income $377,000 992,000 1,144,000 $2,585,000 $ 331,000 992,000 1,262,000 $ 2,513,000 $ 2,585,000 $ 5,076,000 4,213,080 862,920 $ 126,000 197,000 323,000 $539,920 The company paid dividends of $421,920 last year. The "Investment in Buisson, S.A.," on the balan n 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 Beginning Balance Ending Balance $ 126,000 484,000 475,000 $ 126,000 340,000 572,000 822,000 815,000 406,000 434,000 247,000 251,000 $ 2,513,000 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 Sales Joel de Paris, Incorporated Income Statement Operating expenses Net operating income Interest and taxes: Tax expense Interest expense Net income $377,000 992,000 1,144,000 $2,585,000 $ 331,000 992,000 1,262,000 $ 2,513,000 $ 2,585,000 $ 5,076,000 4,213,080 862,920 $ 126,000 197,000 323,000 $539,920 The company paid dividends of $421,920 last year. The "Investment in Buisson, S.A.," on the balan n 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
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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
Beginning
Balance
$ 126,000
340,000
Ending
Balance
$ 126,000
484,000
572,000
822,000
406,000
475,000
815,000
434,000
247,000
251,000
$ 2,513,000
$ 2,585,000
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
$377,000
992,000
1,144,000
$ 331,000
992,000
1,262,000
$ 2,513,000 $ 2,585,000
Income Statement
Sales
Operating expenses
Interest and taxes:
Net operating income
Interest expense
Tax expense
Net income
$ 126,000
197,000
$ 5,076,000
4,213,080
862,920
323,000
$ 539,920
The company paid dividends of $421,920 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?
1. Average operating assets
2. Margin
2. Turnover
2. ROI
3. Residual income
%
%
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