Problem 11-15 Return on Investment (ROI) and Residual Income [LO11-1, LO11-2]

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

Joel de Paris, Inc Balance Sheet Beginning Ending Balance Balance Assets 130,000 129,000 Cash Accounts receivable 347,000 471,000 Inventory 571,000 479,000 Plant and equipment, net 822,000 831,000 Investment in Buisson, S.A 406,000 433,000 Land (undeveloped) 247,000 247,000 Total assets $2,523,000 $2,590,000 Liabilities and Stockholders' Equity 389,000 335,000 Accounts payable Long-term debt 1,027,000 1,027,000 Stockholders' equity 1,107,000 1,228,000 Total liabilities and stockholders' equity $2,523,000 $2,590,000 Joel de Paris, Inc Income Statement Sales 3,969,000 3,333,960 Operating expenses 635,040 Net operating income Interest and taxes: 127,000 Interest expense Tax expense 206,000 333,000 Net income 302,040