Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated Balance Sheet Beginning Balance Ending Balance Assets Cash $ 128,000 $ 125,000 Accounts receivable 332,000 476,000 Inventory 565,000 481,000 Plant and equipment, net 905,000 888,000 Investment in Buisson, S.A. 397,000 429,000 Land (undeveloped) 247,000 251,000 Total assets $ 2,574,000 $ 2,650,000 Liabilities and Stockholders' Equity Accounts payable $ 377,000 $ 340,000 Long-term debt 976,000 976,000 Stockholders' equity 1,221,000 1,334,000 Total liabilities and stockholders' equity $ 2,574,000 $ 2,650,000 Joel de Paris, Incorporated Income Statement Sales $ 4,875,000 Operating expenses 4,192,500 Net operating income 682,500 Interest and taxes: Interest expense $ 123,000 Tax expense 200,000 323,000 Net income $ 359,500 The company paid dividends of $246,500 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 2. Margin % 2. Turnover 2. ROI % 3. Residual income

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter3: The Basics Of Record Keeping And Financial Statement Preparation: Income Statement

Section: Chapter Questions

Problem 20P

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Question

Financial data for Joel de Paris, Incorporated, for last year follow:

	Beginning Balance	Ending Balance
Joel de Paris, Incorporated Balance Sheet
Assets
Cash	$ 128,000	$ 125,000
Accounts receivable	332,000	476,000
Inventory	565,000	481,000
Plant and equipment, net	905,000	888,000
Investment in Buisson, S.A.	397,000	429,000
Land (undeveloped)	247,000	251,000
Total assets	$ 2,574,000	$ 2,650,000
Liabilities and Stockholders' Equity
Accounts payable	$ 377,000	$ 340,000
Long-term debt	976,000	976,000
Stockholders' equity	1,221,000	1,334,000
Total liabilities and stockholders' equity	$ 2,574,000	$ 2,650,000

Joel de Paris, Incorporated Income Statement
Sales		$ 4,875,000
Operating expenses		4,192,500
Net operating income		682,500
Interest and taxes:
Interest expense	$ 123,000
Tax expense	200,000	323,000
Net income		$ 359,500

The company paid dividends of $246,500 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?