In: Accounting
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc. Balance Sheet |
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Beginning Balance |
Ending Balance |
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Assets | ||||||
Cash | $ | 126,000 | $ | 137,000 | ||
Accounts receivable | 344,000 | 478,000 | ||||
Inventory | 571,000 | 477,000 | ||||
Plant and equipment, net | 809,000 | 798,000 | ||||
Investment in Buisson, S.A. | 390,000 | 428,000 | ||||
Land (undeveloped) | 247,000 | 250,000 | ||||
Total assets | $ | 2,487,000 | $ | 2,568,000 | ||
Liabilities and Stockholders' Equity | ||||||
Accounts payable | $ | 385,000 | $ | 332,000 | ||
Long-term debt | 1,035,000 | 1,035,000 | ||||
Stockholders' equity | 1,067,000 | 1,201,000 | ||||
Total liabilities and stockholders' equity | $ | 2,487,000 | $ | 2,568,000 | ||
Joel de Paris, Inc. Income Statement |
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Sales | $ | 4,114,000 | |||||||
Operating expenses | 3,373,480 | ||||||||
Net operating income | 740,520 | ||||||||
Interest and taxes: | |||||||||
Interest expense | $ | 115,000 | |||||||
Tax expense | 197,000 | 312,000 | |||||||
Net income | $ | 428,520 | |||||||
The company paid dividends of $294,520 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. (Do not round intermediate calculations and round your final answers to 2 decimal places.)
3. What was the company’s residual income last year?