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 Ending Balance $ 127,000 $ 126,000 334,000 471,000 570,000 474,000 809,000 809,000 396,000 433,000 250,000 247,000 $ 2,486,000 $2,560,000 $ 342,000 952,000 1,266,000 $2,560,000 $ 371,000 952,000 1,163,000 $ 2,486,000 Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense $112,000 194,000 $ 5,208,000 4,478,880 729,120 Tax expense Net income 306,000 $ 423,120 The company paid dividends of $320,120 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 % %

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

Assets
Joel de Paris, Incorporated
Balance Sheet
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
Beginning
Balance
$ 127,000
334,000
570,000
809,000
396,000
250,000
$ 2,486,000
Ending
Balance
$ 126,000
471,000
474,000
809,000
433,000
247,000
$ 371,000
952,000
1,163,000
$ 2,486,000
$ 2,560,000
$ 342,000
952,000
1,266,000
$ 2,560,000
Sales
$ 5,208,000
Operating expenses
Net operating income
4,478,880
729,120
Interest and taxes:
$ 112,000
194,000
306,000
$ 423,120
Interest expense
Tax expense
Net income
The company paid dividends of $320,120 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
%
%
Transcribed Image Text:Assets Joel de Paris, Incorporated Balance Sheet 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 Beginning Balance $ 127,000 334,000 570,000 809,000 396,000 250,000 $ 2,486,000 Ending Balance $ 126,000 471,000 474,000 809,000 433,000 247,000 $ 371,000 952,000 1,163,000 $ 2,486,000 $ 2,560,000 $ 342,000 952,000 1,266,000 $ 2,560,000 Sales $ 5,208,000 Operating expenses Net operating income 4,478,880 729,120 Interest and taxes: $ 112,000 194,000 306,000 $ 423,120 Interest expense Tax expense Net income The company paid dividends of $320,120 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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