Question
In: Accounting
Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash $ 134,000 $ 137,000...
|
Joel de Paris, Inc. Balance Sheet |
||||||
|
Beginning Balance |
Ending Balance |
|||||
| Assets | ||||||
| Cash | $ | 134,000 | $ | 137,000 | ||
| Accounts receivable | 334,000 | 481,000 | ||||
| Inventory | 563,000 | 474,000 | ||||
| Plant and equipment, net | 829,000 | 808,000 | ||||
| Investment in Buisson, S.A. | 407,000 | 432,000 | ||||
| Land (undeveloped) | 248,000 | 251,000 | ||||
| Total assets | $ | 2,515,000 | $ | 2,583,000 | ||
| Liabilities and Stockholders' Equity | ||||||
| Accounts payable | $ | 385,000 | $ | 339,000 | ||
| Long-term debt | 1,025,000 | 1,025,000 | ||||
| Stockholders' equity | 1,105,000 | 1,219,000 | ||||
| Total liabilities and stockholders' equity | $ | 2,515,000 | $ | 2,583,000 | ||
|
Joel de Paris, Inc. Income Statement |
|||||||||
| Sales | $ | 5,076,000 | |||||||
| Operating expenses | 4,314,600 | ||||||||
| Net operating income | 761,400 | ||||||||
| Interest and taxes: | |||||||||
| Interest expense | $ | 117,000 | |||||||
| Tax expense | 204,000 | 321,000 | |||||||
| Net income | $ | 440,400 | |||||||
The company paid dividends of $326,400 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?
Solutions
Expert Solution
1. Compute the company's average operating assets for last year.
|
Beginning Balances |
Ending Balances |
|
|
Cash |
1,34,000 |
1,37,000 |
|
Accounts receivable |
3,34,000 |
4,81,000 |
|
Inventory |
5,63,000 |
4,74,000 |
|
Plant and equipment (net) |
8,29,000 |
8,08,000 |
|
Total operating assets |
18,60,000 |
19,00,000 |
Average operating assets = ($18,60,000 + $19,00,000) / 2
= $18,80,000
2. Compute the company’s margin, turnover, and return on investment (ROI) for last year
Margin = Net operating income / Sales
= $7,61,400 / $50,76,000
= 15%
Turnover =Sales / Average operating assets
= $50,76,000 / $18,80,000
= 2.70
ROI = Margin × Turnover= 15% x 2.70
= 40.5%
3. What was the company’s residual income last year?
Net operating income $7,61,400
Less : Minimum required return $2,82,000
($1880000 x 15%)
Residual income $4,79,400
ekkarill92 answered 1 year agoRelated Solutions
Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash $ 131,000 $ 136,000...
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
131,000
$
136,000
Accounts receivable
333,000
483,000
Inventory
577,000
485,000
Plant and equipment, net
889,000
866,000
Investment in Buisson, S.A.
396,000
435,000
Land (undeveloped)
247,000
254,000
Total assets
$
2,573,000
$
2,659,000
Liabilities and Stockholders'
Equity
Accounts payable
$
384,000
$
331,000
Long-term debt
1,021,000
1,021,000
Stockholders' equity
1,168,000
1,307,000
Total liabilities and stockholders' equity
$
2,573,000
$
2,659,000
Joel de Paris, Inc.
Income Statement
Sales
$...
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
127,000
$
126,000
Accounts receivable
349,000
477,000
Inventory
570,000
473,000
Plant and equipment, net
864,000
874,000
Investment in Buisson, S.A.
408,000
429,000
Land (undeveloped)
253,000
254,000
Total assets
$
2,571,000
$
2,633,000
Liabilities and Stockholders'
Equity
Accounts payable
$
376,000
$
340,000
Long-term debt
1,035,000
1,035,000
Stockholders' equity
1,160,000
1,258,000
Total liabilities and stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
136,000
$
134,000
Accounts receivable
336,000
471,000
Inventory
573,000
484,000
Plant and equipment, net
785,000
781,000
Investment in Buisson, S.A.
392,000
431,000
Land (undeveloped)
254,000
252,000
Total assets
$
2,476,000
$
2,553,000
Liabilities
and Stockholders' Equity
Accounts payable
$
382,000
$
349,000
Long-term debt
1,016,000
1,016,000
Stockholders' equity
1,078,000
1,188,000
Total liabilities and
stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
126,000
$
127,000
Accounts receivable
349,000
490,000
Inventory
567,000
478,000
Plant and equipment, net
848,000
835,000
Investment in Buisson, S.A.
404,000
432,000
Land (undeveloped)
252,000
251,000
Total assets
$
2,546,000
$
2,613,000
Liabilities and Stockholders'
Equity
Accounts payable
$
378,000
$
338,000
Long-term debt
978,000
978,000
Stockholders' equity
1,190,000
1,297,000
Total liabilities and stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
136,000
$
132,000
Accounts receivable
342,000
487,000
Inventory
561,000
489,000
Plant and equipment, net
831,000
802,000
Investment in Buisson, S.A.
402,000
432,000
Land (undeveloped)
254,000
246,000
Total assets
$
2,526,000
$
2,588,000
Liabilities
and Stockholders' Equity
Accounts payable
$
376,000
$
349,000
Long-term debt
1,002,000
1,002,000
Stockholders' equity
1,148,000
1,237,000
Total liabilities and
stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance
Assets Cash $ 133,000 $ 133,000 Accounts receivable 338,000 475,000
Inventory 568,000 490,000 Plant and equipment, net 811,000 792,000
Investment in Buisson, S.A. 405,000 432,000 Land (undeveloped)
245,000 254,000 Total assets $ 2,500,000 $ 2,576,000 Liabilities
and Stockholders' Equity Accounts payable $ 387,000 $ 335,000
Long-term debt 1,003,000 1,003,000 Stockholders' equity 1,110,000
1,238,000 Total liabilities and stockholders' equity $...
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
131,000
$
126,000
Accounts receivable
331,000
485,000
Inventory
574,000
489,000
Plant and equipment, net
894,000
870,000
Investment in Buisson, S.A.
405,000
432,000
Land (undeveloped)
248,000
248,000
Total assets
$
2,583,000
$
2,650,000
Liabilities and Stockholders'
Equity
Accounts payable
$
377,000
$
337,000
Long-term debt
1,044,000
1,044,000
Stockholders' equity
1,162,000
1,269,000
Total liabilities and stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
133,000
$
135,000
Accounts receivable
343,000
473,000
Inventory
570,000
483,000
Plant and equipment, net
874,000
869,000
Investment in Buisson, S.A.
393,000
432,000
Land (undeveloped)
247,000
246,000
Total assets
$
2,560,000
$
2,638,000
Liabilities and Stockholders'
Equity
Accounts payable
$
388,000
$
330,000
Long-term debt
999,000
999,000
Stockholders' equity
1,173,000
1,309,000
Total liabilities and stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
139,000
$
136,000
Accounts receivable
348,000
477,000
Inventory
560,000
489,000
Plant and equipment, net
793,000
778,000
Investment in Buisson, S.A.
406,000
435,000
Land (undeveloped)
252,000
250,000
Total assets
$
2,498,000
$
2,565,000
Liabilities and Stockholders' Equity
Accounts payable
$
386,000
$
346,000
Long-term debt
956,000
956,000
Stockholders' equity
1,156,000
1,263,000
Total liabilities and
stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
132,000
$
138,000
Accounts receivable
341,000
484,000
Inventory
566,000
478,000
Plant and equipment, net
891,000
870,000
Investment in Buisson, S.A.
404,000
430,000
Land (undeveloped)
251,000
253,000
Total assets
$
2,585,000
$
2,653,000
Liabilities and Stockholders'
Equity
Accounts payable
$
385,000
$
349,000
Long-term debt
1,004,000
1,004,000
Stockholders' equity
1,196,000
1,300,000
Total liabilities and stockholders' equity
$...
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