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 Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income $ 113,000 191,000 $ 4,180,000 3,636,600 543,400 304,000 $ 239,400 Beginning Balance $ 139,000 345,000 578,000 818,000 395,000 246,000 $ 2,521,000 Ending Balance $ 127,000 473,000 488,000 832,000 435,000 254,000 $ 2,609,000 $ 384,000 1,034,000 1,103,000 $ 2,521,000 $ 2,609,000 $ 347,000 1,034,000 1,228,000 The company paid dividends of $114,400 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. (Do not round intermediate calculations and round your final answers to 2 decimal places.) 3. What was the company's residual income last year? 1. Average operating assets
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 Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income $ 113,000 191,000 $ 4,180,000 3,636,600 543,400 304,000 $ 239,400 Beginning Balance $ 139,000 345,000 578,000 818,000 395,000 246,000 $ 2,521,000 Ending Balance $ 127,000 473,000 488,000 832,000 435,000 254,000 $ 2,609,000 $ 384,000 1,034,000 1,103,000 $ 2,521,000 $ 2,609,000 $ 347,000 1,034,000 1,228,000 The company paid dividends of $114,400 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. (Do not round intermediate calculations and round your final answers to 2 decimal places.) 3. What was the company's residual income last year? 1. Average operating assets
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
Joel de Paris, Incorporated
Income Statement
Sales
Operating expenses
Net operating income
Interest and taxes:
Interest expense
Tax expense
Net income
$ 113,000
191,000
$ 4,180,000
3,636,600
543,400
1. Average operating assets
2. Margin
2. Turnover
2. ROI
3. Residual income
304,000
$ 239,400
Beginning
Balance
%
$ 139,000
345,000
578,000
818,000
395,000
246,000
$ 2,521,000
%
$ 384,000
1,034,000
1,103,000
$ 2,521,000
The company paid dividends of $114,400 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
$ 127,000
473,000
488,000
832,000
435,000
254,000
$ 2,609,000
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?
$ 347,000
1,034,000
1,228,000
$ 2,609,000
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