Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash $ 134,000

Financial data for Joel de Paris, Inc., for last year follow:

Joel de Paris, Inc. Balance Sheet
Beginning Balance Ending Balance
Assets
Cash $ 134,000 $ 128,000
Accounts receivable 332,000 473,000
Inventory 564,000 478,000
Plant and equipment, net 800,000 791,000
Investment in Buisson, S.A. 409,000 434,000
Land (undeveloped) 247,000 250,000
Total assets $ 2,486,000 $ 2,554,000
Liabilities and Stockholders' Equity
Accounts payable $ 389,000 $ 339,000
Long-term debt 1,041,000 1,041,000
Stockholders' equity 1,056,000 1,174,000
Total liabilities and stockholders' equity $ 2,486,000 $ 2,554,000

Joel de Paris, Inc. Income Statement
Sales $ 4,995,000
Operating expenses 4,145,850
Net operating income 849,150
Interest and taxes:
Interest expense $ 124,000
Tax expense 209,000 333,000
Net income $ 516,150

The company paid dividends of $398,150 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 companys margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.)

3. What was the companys residual income last year?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Warren S. Carl

23rd Edition

0324555865, 978-0324555868

More Books

Students also viewed these Accounting questions

Question

Question Can a Roth IRA invest in stock of the IRA owners business?

Answered: 1 week ago