Chapter 11

Question

Requirement 1-3

Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance sheet Beginning Balance Ending Balance 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 $ 133,000 342,000 572,000 823,000 395,000 254,000 $ 2,519,000 $ 135,000 485,000 484,000 806,000 428,000 248,000 $ 2,586,000 $ 379,000 991, 000 1,149,000 $ 2,519,000 $ 341,000 991,000 1,254,000 $ 2,586,000 Joel de Paris, Inc. Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense $ 120,000 Tax expense 191,000 Net income $ 4,536,000 3,900,960 635, 040 311,000 324, 040 $ The company paid dividends of $219,040 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? 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 Margin 2. Turnover ROI Residual income