Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. 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 Sales Operating expenses Net operating income Interest and taxes: Interest expense Net income Joel de Paris, Inc. Income Statement Tax expense 1. 2. 3. $ 128,000 193,000 $5,211,000 4,429,350 781,650 Average operating assets Margin Turnover ROI Residual income 321,000 $ 460,650 Beginning Balance % % $ 127,000 $ 137,000 487,000 483,000 345,000 566,000 872,000 391,000 253,000 $ 2,554,000 The company paid dividends of $348,650 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%. Ending Balance $ 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? 843,000 427,000 250,000 $2,627,000 389,000 $ 350,000 993,000 993,000 1,172,000 1,284,000 $2,554,000 $2,627,000
Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. 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 Sales Operating expenses Net operating income Interest and taxes: Interest expense Net income Joel de Paris, Inc. Income Statement Tax expense 1. 2. 3. $ 128,000 193,000 $5,211,000 4,429,350 781,650 Average operating assets Margin Turnover ROI Residual income 321,000 $ 460,650 Beginning Balance % % $ 127,000 $ 137,000 487,000 483,000 345,000 566,000 872,000 391,000 253,000 $ 2,554,000 The company paid dividends of $348,650 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%. Ending Balance $ 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? 843,000 427,000 250,000 $2,627,000 389,000 $ 350,000 993,000 993,000 1,172,000 1,284,000 $2,554,000 $2,627,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2]
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc.
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
Sales
Operating expenses
Net operating income
Interest and taxes:
Interest expense
Net income
Joel de Paris, Inc.
Income Statement
Tax expense
1.
2.
3.
$ 128,000
193,000
$5,211,000
4,429,350
781,650
Average operating assets
Margin
Turnover
ROI
Residual income
321,000
$ 460,650
Beginning
Balance
%
%
$ 127,000 $ 137,000
345,000
487,000
566,000
483,000
872,000
391,000
253,000
$ 2,554,000
The company paid dividends of $348,650 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%.
Ending
Balance
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?
$
843,000
427,000
250,000
$2,627,000
389,000 $
993,000
1,172,000
350,000
993,000
1,284,000
$2,554,000 $2,627,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F289d7ed8-9d63-4fcc-b825-f4057b595b28%2F9670eec4-0f34-4e31-9a45-d051b4035880%2Fwkx3meu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2]
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc.
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
Sales
Operating expenses
Net operating income
Interest and taxes:
Interest expense
Net income
Joel de Paris, Inc.
Income Statement
Tax expense
1.
2.
3.
$ 128,000
193,000
$5,211,000
4,429,350
781,650
Average operating assets
Margin
Turnover
ROI
Residual income
321,000
$ 460,650
Beginning
Balance
%
%
$ 127,000 $ 137,000
345,000
487,000
566,000
483,000
872,000
391,000
253,000
$ 2,554,000
The company paid dividends of $348,650 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%.
Ending
Balance
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?
$
843,000
427,000
250,000
$2,627,000
389,000 $
993,000
1,172,000
350,000
993,000
1,284,000
$2,554,000 $2,627,000
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