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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 Beginning Balance Ending Balance $ 127,000 $ 126,000 334,000 471,000 570,000 474,000 809,000 809,000 396,000 433,000 250,000 247,000 $ 2,486,000 $2,560,000 $ 342,000 952,000 1,266,000 $2,560,000 $ 371,000 952,000 1,163,000 $ 2,486,000 Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense $112,000 194,000 $ 5,208,000 4,478,880 729,120 Tax expense Net income 306,000 $ 423,120 The company paid dividends of $320,120 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? 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3 Residual income % %

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 Beginning Balance Ending Balance $ 127,000 $ 126,000 334,000 471,000 570,000 474,000 809,000 809,000 396,000 433,000 250,000 247,000 $ 2,486,000 $2,560,000 $ 342,000 952,000 1,266,000 $2,560,000 $ 371,000 952,000 1,163,000 $ 2,486,000 Joel de Paris, Incorporated Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense $112,000 194,000 $ 5,208,000 4,478,880 729,120 Tax expense Net income 306,000 $ 423,120 The company paid dividends of $320,120 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? 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3 Residual income % %

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assets Joel de Paris, Incorporated Balance Sheet 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 Joel de Paris, Incorporated Income Statement Beginning Balance $ 127,000 334,000 570,000 809,000 396,000 250,000 $ 2,486,000 Ending Balance $ 126,000 471,000 474,000 809,000 433,000 247,000 $ 371,000 952,000 1,163,000 $ 2,486,000 $ 2,560,000 $ 342,000 952,000 1,266,000 $ 2,560,000 Sales $ 5,208,000 Operating expenses Net operating income 4,478,880 729,120 Interest and taxes: $ 112,000 194,000 306,000 $ 423,120 Interest expense Tax expense Net income The company paid dividends of $320,120 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? 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3. Residual income % %
Transcribed Image Text:Assets Joel de Paris, Incorporated Balance Sheet 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 Joel de Paris, Incorporated Income Statement Beginning Balance $ 127,000 334,000 570,000 809,000 396,000 250,000 $ 2,486,000 Ending Balance $ 126,000 471,000 474,000 809,000 433,000 247,000 $ 371,000 952,000 1,163,000 $ 2,486,000 $ 2,560,000 $ 342,000 952,000 1,266,000 $ 2,560,000 Sales $ 5,208,000 Operating expenses Net operating income 4,478,880 729,120 Interest and taxes: $ 112,000 194,000 306,000 $ 423,120 Interest expense Tax expense Net income The company paid dividends of $320,120 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? 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3. Residual income % %
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