1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Dmitriy789 [7]
2 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]2 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

You might be interested in
When would your credit card company charge you an overlimit fee?
Anna71 [15]
D) when you charge more than your current credit limit
Why: because my sister has done it and I did that question in my school
Hope this helps good luck!!
5 0
2 years ago
Metzler Communications designs and programs a website for a local business. Metzler charges $33,000 for the project, and the loc
Grace [21]

Answer and Explanation:

1. The Journal entry is shown below:-

Notes receivable Dr, $33,000

        To Sales revenue $33,000

(Being sales is recorded)

2. The computation of interest is shown below:-

Interest = $33,000 × 4% × 6 ÷ 12

= $660

3. The Journal entry is shown below:-

Cash Dr, $33,660

       To Interest income $660

       To Notes receivable $33,000

(Being collection of notes receivable is recorded)

3 0
3 years ago
The credit portion of the adjustment for the depletion of a coal mine was credited to the Coal Mine account. This error would ca
alex41 [277]

its not b. the periods net income to be understated

7 0
2 years ago
The local fire department is using a selection test to measure the ability to continue maximum effort requiring prolonged effort
Airida [17]
<span>The type of physical ability is the fire department measuring is called <u>“Stamina”</u>.
</span>
<span>Strength is one thing, the ability to continue exerting the same amount of strength over time is called stamina. Stamina is important especially in quick-response jobs which usually cater to emergencies</span>
6 0
3 years ago
Read 2 more answers
On January 1, 2017, Bensen Company leased equipment to Flynn Corporation. The following information pertains to this lease.
IRINA_888 [86]

Answer:

Please see attachment

Explanation:

Please see attachment

7 0
3 years ago
Other questions:
  • If your instructor advises you to use the keys at the top of your keyboard that are identified by the letter f and then a number
    15·1 answer
  • Suppose the United States is currently producing 200 tons of hamburgers and 60 tons of tacos and Mexico is currently producing 4
    12·1 answer
  • Why might a bank be willing to borrow funds from other banks at a higher rate than the rate at which it can borrow from the fed?
    12·1 answer
  • A company's relevant range of production is 10,000 to 15,000 units. When it produces and sells 12,000 units, its unit costs are
    5·1 answer
  • If a project activity experiences positive variation:
    9·1 answer
  • The projected benefit obligation (PBO):
    7·1 answer
  • Procter &amp; Gamble reported the following information for its fiscal year end: On net sales of $57.690 billion, the company ea
    15·1 answer
  • All of the following statements regarding retained earnings are true exceptA. retained earnings represents a claim on cash.B. a
    14·1 answer
  • Lowden Company has an overhead application rate of 162% and allocates overhead based on direct material cost. During the current
    10·1 answer
  • Walter had to invest. He split the money into three types of investment: small caps earning , global market investments earning
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!