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Dmitriy789 [7]
3 years ago
14

Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance

Assets Cash $ 134,000 $ 126,000 Accounts receivable 342,000 487,000 Inventory 567,000 481,000 Plant and equipment, net 807,000 796,000 Investment in Buisson, S.A. 409,000 428,000 Land (undeveloped) 251,000 254,000 Total assets $ 2,510,000 $ 2,572,000 Liabilities and Stockholders' Equity Accounts payable $ 378,000 $ 340,000 Long-term debt 1,010,000 1,010,000 Stockholders' equity 1,122,000 1,222,000 Total liabilities and stockholders' equity $ 2,510,000 $ 2,572,000 Joel de Paris, Inc. Income Statement Sales $ 3,927,000 Operating expenses 3,337,950 Net operating income 589,050 Interest and taxes: Interest expense $ 110,000 Tax expense 199,000 309,000 Net income $ 280,050 The company paid dividends of $180,050 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?
Business
1 answer:
Nikolay [14]3 years ago
8 0

Answer:

Please see the detailed solution below:

Explanation:

Solution 1:

Average Operating Assets = (Beginning Operating Assets + Ending Operating Assets) / 2

Average Operating Assets = ($1,850,000 + $1,890,000) / 2

Average Operating Assets = $3,740,000 / 2

Average Operating Assets = $1,870,000

Solution 2:

Margin = Net Operating Income / Sales

Margin = $589,050 / $3,927,000

Margin = 0.15 i.e., 15%

Turnover = Sales / Average Operating Assets

Turnover = $3,927,000 / $1,870,000

Turnover = 2.1

Return on Investment = Margin x Turnover

Return on Investment = 15% x 2.1

Return on Investment = 31.5%

Solution 3:

Residual Income = Net Operating Income - (Minimum Required Rate of Return x Average Operating Assets)

Residual Income = $589,050 - (15% x $1,870,000)

Residual Income = $589,050 - $280,500

Residual Income = $308,550

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The definition of inventory includes which of the following items? (Select all that apply.) a) items used currently in the produ
Yanka [14]

Answer:

Items a) and b)

a) items used currently in the production of goods to be sold items

b) held for resale items currently in production for future

Explanation:

Inventory consists of current assets to be used in production of final goods or are the ones which are final goods and held for sale.

In the given case also, statement a includes raw materials, which are used to make the final good to be sold, which is a part of inventory.

Further, statement b includes work in production or final goods which are currently in production but would be resold.

The items which are kept for their use as like machinery or furniture or which shall be disposed are not inventory but are in fixed assets category.

3 0
3 years ago
Money demand is given by md/p = 1000 .2y - 1000i. given that p = 200, y = 2000, and i = .10, real money demand is equal to?
Marrrta [24]

The real money demand is equal to $2,60,000

Money demand/ P = 1000+0.2Y -1000i

Money demand/200= 1000+0.2(2000)-1000(0.1)= 1000+400-100

=1300

Money demand  /200 = 1300

Money demand  = $1300*200

= $2,60,000

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4 0
2 years ago
Jack just bought a car. what risk does he face?
Oxana [17]

Jack can face multiple risks.

He can be injured or killed in a car wreck.

He can injure or kill someone in a car wreck.

Bills.

Car note.

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4 0
3 years ago
Read 2 more answers
Han Products manufactures 25,000 units of part S-6 each year for use on its production line. At this level of activity, the cost
umka2103 [35]

Answer:

$25,000

Explanation:

The computation of the financial advantage or disadvantage of accepting the outside supplier’s offer is shown below:

But before that first we have to compute the relevant cost for 25,000 units which is given below:

= (Direct material per unit + Direct labor per unit + Variable manufacturing overhead per unit × number of units manufactured) + (Fixed manufacturing overhead ×  number of units manufactured × remaining portion applied)

= ($3.9 + $8 + $2.10) × 25,000 units + ($6 × 25,000 units × 1 ÷3)

= $400,000

Now  

Financial Advantage (disadvantage) of accepting the outside offer is

= (Relevant cost at 25,000 units - per part price × number of units manufactured) + (Annual rental amount)

= ($400,000 - $18 × 25,000 units) + $75,000

= $25,000

Since this amount comes in positive which signifies the financial advantage

4 0
3 years ago
Murkywater Company is considering a lockbox system. Its collection delay is currently 12 days.
Anna007 [38]

Answer:

$6,400,000

Explanation:

Reduction in mailing time = 1.5 day

Reduction in clearing time = 1.5 day

Reduction in firm processing time = 1.0 day

Total = 4.0 days

Daily interest on Treasury bills = 0.025%

Average number of daily payments to lockboxes = 4,000

Average size of payment = $400

The value of the proposal will be the average number of daily payments to lockboxes multiplied by the total of 4 days which is then multiplied by the average payment size. This will be:

= 4000 × $400 × 4

= $6,400,000

7 0
3 years ago
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