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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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T = 5c + 12 f

A manufacturer shipped units of a certain product to two locations. The equation above shows the total shipping cost T, in dollars, for shipping c units to the closer location and shipping f units to the farther location. If the total shipping cost was $47,000 and 3,000 units were shipped to the farther location, how many units were shipped to the closer location?

Given the following equation:

T = 5c + 12 f

You know that "T" is the total shipping cost (in dollars), "c" is the number of units shipped to the closer location and "f" is the number of units shipped to the farther location.

Based on the information given in the exercise, you can identify that, in this case:

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Then, knowing those values, you need to substitute them into the given equation:

47,000 = 5c + 12(3,000)

And finally, you must solve for "c" in order to calculate the number of units that  were shipped to the closer location.

You get that this is:

47,000 = 5c + 12(3,000)\\\\47,000-36,000 = 5c\\\\11,000=5c\\\\\frac{11,000}{5}\\\\c=2,200

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3 years ago
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Answer:

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Explanation:

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Park &amp; company was recently formed with a $6,900 investment in the company by stockholders in exchange for common stock. the
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