Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated Balance Sheet Assets Cash…

Financial data for Joel de Paris, Incorporated, for last year follow: Joel de Paris, Incorporated Balance Sheet Assets Cash…

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Financial data for Joel de Paris, Incorporated, for last year follow:
Joel de Paris, Incorporated
Balance Sheet
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
Joel de Paris, Incorporated
Income Statement
Sales
Operating expenses
Net operating income
Interest and taxes:
Interest expense
Tax expense
Net income
$ 126,000
204,000
Beginning
Balance
$ 137,000
338,000
567,000
808,000
407,000
252,000
$ 2,509,000
$ 386,000
962,000
1,161,000
$ 2,509,000
$ 4,301,000
3,698,860
602,140
330,000
$ 272,140
Ending Balance
$ 135,000
481,000
474,000
800,000
432,000
254,000
$ 2,576,000
$ 343,000
962,000
1,271,000
$ 2,576,000
The company paid dividends of $162,140 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
%
%

Expert Answer:

Answer rating: 100% (QA)

Beginning balance Ending balance Cash 137000 135000 Account Receivable 338000
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