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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 $ 137,000 487,000 483,000 345,000 566,000 872,000 391,000 253,000 $ 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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
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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