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 $ 137,000

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

Joel de Paris, Inc. Balance Sheet
Beginning Balance Ending Balance
Assets
Cash $ 137,000 $ 128,000
Accounts receivable 342,000 484,000
Inventory 562,000 481,000
Plant and equipment, net 789,000 777,000
Investment in Buisson, S.A. 406,000 430,000
Land (undeveloped) 253,000 245,000
Total assets $ 2,489,000 $ 2,545,000
Liabilities and Stockholders' Equity
Accounts payable $ 370,000 $ 350,000
Long-term debt 1,019,000 1,019,000
Stockholders' equity 1,100,000 1,176,000
Total liabilities and stockholders' equity $ 2,489,000 $ 2,545,000

Joel de Paris, Inc. Income Statement
Sales $ 4,255,000
Operating expenses 3,574,200
Net operating income 680,800
Interest and taxes:
Interest expense $ 113,000
Tax expense 209,000 322,000
Net income $ 358,800

The company paid dividends of $282,800 last year. The Investment in Buisson, S.A., on the balance sheet represents an investment in the stock of another company.

Required:
1.

Compute the companys margin, turnover, and return on investment (ROI) for last year. (Round your answers to 2 decimal places.)

Margin %
Turnover
RoI %
2.

The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 17%. What was the companys residual income last year?

Net Operating Income
Minimum Required Return
Residual Income $

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

Essentials Of Auditing And Assurance Services An Integrated Approach

Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Al Arens

1st Edition

0130463035, 9780130463036

More Books

Students also viewed these Accounting questions