inancial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated Balance Sheet Beginning Balance Ending Balance Assets Cash $ 136,000 $ 137,000 Accounts receivable 341,000 471,000 Inventory 569,000 478,000 Plant and equipment, net 834,000 834,000 Investment in Buisson, S.A. 406,000 430,000 Land (undeveloped) 247,000 250,000 Total assets $ 2,533,000 $ 2,600,000 Liabilities and Stockholders' Equity Accounts payable $ 380,000 $ 339,000 Long-term debt 962,000 962,000 Stockholders' equity 1,191,000 1,299,000 Total liabilities and stockholders' equity $ 2,533,000 $ 2,600,000 Joel de Paris, Incorporated Income Statement Sales $ 4,750,000 Operating expenses 3,990,000 Net operating income 760,000 Interest and taxes: Interest expense $ 125,000 Tax expense 207,000 332,000 Net income $ 428,000 The company paid dividends of $320,000 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?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Financial data for Joel de Paris, Incorporated, for last year follow:

 

Joel de Paris, Incorporated
Balance Sheet
  Beginning Balance Ending Balance
Assets    
Cash $ 136,000 $ 137,000
Accounts receivable 341,000 471,000
Inventory 569,000 478,000
Plant and equipment, net 834,000 834,000
Investment in Buisson, S.A. 406,000 430,000
Land (undeveloped) 247,000 250,000
Total assets $ 2,533,000 $ 2,600,000
Liabilities and Stockholders' Equity    
Accounts payable $ 380,000 $ 339,000
Long-term debt 962,000 962,000
Stockholders' equity 1,191,000 1,299,000
Total liabilities and stockholders' equity $ 2,533,000 $ 2,600,000


 

Joel de Paris, Incorporated
Income Statement
Sales   $ 4,750,000
Operating expenses   3,990,000
Net operating income   760,000
Interest and taxes:    
Interest expense $ 125,000  
Tax expense 207,000 332,000
Net income   $ 428,000


The company paid dividends of $320,000 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?

 

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