P12–6 Return on investment (ROI) and residual income Time allowed: 20 minutes Financial data for Joel de Paris plc for last year follow:

The company paid dividends of £15,000 last year. The ‘Investment in Buisson’, on the balance sheet represents an investment in the shares of another company.
Requried 1 Compute the company’s margin, turnover and ROI for last year.
2 The board of directors of Joel de Paris Inc has set a minimum required return of 15%. What was the company’s residual income last year?

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Assets Cash Debtors Stock Plant and equipment, net Investment in Buisson SA Land (undeveloped) Total assets Joel de Paris plc Balance sheet Ending balance Beginning balance 120,000 140,000 530,000 450,000 380,000 320,000 620,000 680,000 280,000 250,000 170,000 180,000 2,100,000 2,020,000 Liabilities and shareholders' equity 310,000 1,500,000 Creditors Long-term debt Shareholders' equity Total liabilities and shareholders' equity 360,000 1,500,000 290,000 160,000 2,100,000 2,020,000