Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated Balance Sheet
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Question:
Financial data for Joel de Paris, Incorporated, for last year follow:
Joel de Paris, Incorporated Balance Sheet | ||
Beginning Balance | Ending Balance | |
---|---|---|
Assets | ||
Cash | $ 137,000 | $ 126,000 |
Accounts receivable | 346,000 | 481,000 |
Inventory | 578,000 | 475,000 |
Plant and equipment, net | 849,000 | 868,000 |
Investment in Buisson, S.A. | 393,000 | 426,000 |
Land (undeveloped) | 251,000 | 249,000 |
Total assets | $ 2,554,000 | $ 2,625,000 |
Liabilities and Stockholders' Equity | ||
Accounts payable | $ 373,000 | $ 344,000 |
Long-term debt | 995,000 | 995,000 |
Stockholders' equity | 1,186,000 | 1,286,000 |
Total liabilities and stockholders' equity | $ 2,554,000 | $ 2,625,000 |
Joel de Paris, Incorporated Income Statement | ||
Sales | $ 4,825,000 | |
---|---|---|
Operating expenses | 4,004,750 | |
Net operating income | 820,250 | |
Interest and taxes: | ||
Interest expense | $ 117,000 | |
Tax expense | 200,000 | 317,000 |
Net income | $ 503,250 |
The company paid dividends of $403,250 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.
3. What was the company’s residual income last year?
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
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