Joel de Paris, Incorporated Balance Sheet Beginning Balance $ 137,000 Ending Balance $ 137,000 346,000 480,000 571,000 473,000 846,000 850,000 404,000 431,000 248,000 249,000 $2,620,000 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 $ 2,552,000 $ 381,000 988,000 1,183,000 $ 2,552,000 $ 341,000 988,000 1,291,000 $ 2,620,000 Joel de Paris, Incorporated Income Statement Sales Operating expenses Interest and taxes: Net operating income Interest expense Tax expense Net income $ 128,000 200,000 $ 4,608,000 4,008,960 599,040 328,000 $ 271,040 The company paid dividends of $163,040 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? 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3. Residual income % %
Joel de Paris, Incorporated Balance Sheet Beginning Balance $ 137,000 Ending Balance $ 137,000 346,000 480,000 571,000 473,000 846,000 850,000 404,000 431,000 248,000 249,000 $2,620,000 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 $ 2,552,000 $ 381,000 988,000 1,183,000 $ 2,552,000 $ 341,000 988,000 1,291,000 $ 2,620,000 Joel de Paris, Incorporated Income Statement Sales Operating expenses Interest and taxes: Net operating income Interest expense Tax expense Net income $ 128,000 200,000 $ 4,608,000 4,008,960 599,040 328,000 $ 271,040 The company paid dividends of $163,040 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? 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
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
Beginning
Balance
$ 137,000
346,000
571,000
846,000
404,000
248,000
$ 2,552,000
$ 381,000
988,000
1,183,000
$ 2,552,000
Ending
Balance
$ 137,000
480,000
473,000
850,000
431,000
249,000
$ 2,620,000
$ 341,000
988,000
1,291,000
$ 2,620,000
Joel de Paris, Incorporated
Income Statement
Sales
Operating expenses
Interest and taxes:
Net operating income
Interest expense
Tax expense
Net income
$ 128,000
200,000
$ 4,608,000
4,008,960
599,040
328,000
$ 271,040
The company paid dividends of $163,040 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?
1. Average operating assets
2. Margin
2. Turnover
2. ROI
3. Residual income
%
%
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