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
Anton [14]
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 $ 140,000 $ 120,000 Accounts receivable 450,000 530,000 Inventory 320,000 380,000 Plant and equipment, net 680,000 620,000 Investment in Buisson, S.A. 250,000 280,000 Land (undeveloped) 180,000 170,000 Total assets $ 2,020,000 $ 2,100,000 Liabilities and Stockholders' Equity Accounts payable $ 360,000 $ 310,000 Long-term debt 1,500,000 1,500,000 Stockholders' equity 160,000 290,000 Total liabilities and stockholders' equity $ 2,020,000 $ 2,100,000 Joel de Paris, Inc. Income Statement Sales $ 4,050,000 Operating expenses 3,645,000 Net operating income 405,000 Interest and taxes: Interest expense $ 150,000 Tax expense 110,000 260,000 Net income $ 145,000 The company paid dividends of $15,000 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 "Turnover" to 1 decimal place.) 3. What was the company’s residual income last year?
Business
1 answer:
kondor19780726 [428]3 years ago
3 0

Explanation:

The  computation is shown below:

1. Average operating assets is

= (Opening operating assets + closing operating assets) ÷ 2

where,

Opening operating assets is

= Total assets -  Land (undeveloped) - Investment in Buisson, S.A

=$2,020,000 - $180,000 - $250,000

= $1,590,000

And, the closing operating assets is

= Total assets -  Land (undeveloped) - Investment in Buisson, S.A

= $2,100,000 - $170,000 - $280,000

= $1,650,000

So, average operating assets is

= ($1,590,000 + $1,650,000) ÷ 2

= $1,620,000

2.

Margin = Net operating income ÷ Sales

= $405,000 ÷ $4,050,000

= 0.1 or 10%

Turnover is

= Sales ÷ Average operating assets

= $4,050,000 ÷ $1,620,000

= 2.5

Return on Investment = Margin ×Turnover

= 0.1 × 2.5

= 0.25 or 25%

3.  Residual Income = Net operating Income - (Average operating assets × Minimum required rate of return)

= $405,000 - ($1,620,000 × 15%)

= $405,000 - $243000

= $162,000

You might be interested in
You are the curator of a museum. The museum is running short of funds, so you decide to increase revenue. What should you do to
SVETLANKA909090 [29]

Answer and explanation:

Demand elasticity measures the changes in quantity demanded as the result of changes in price. Demand elasticity is calculated by dividing the percentage change in quantity demanded by the percentage change in price. If the result is equal or higher than one (1) the product is <em>elastic </em>but if the result is lower than 1 the product is <em>inelastic</em>.

In the case, <em>as the elasticity of demand of the museum ticket is 0.45 it means the museum tickets is inelastic. This scenario implies that in front of changes of price the quantity demanded will not change. Thus, as a curator of the museum you should </em><u><em>increase the museum ticket price to increase revenue</em></u><em>.</em>

3 0
3 years ago
You are considering purchasing stock in Canyon Echo. You feel the company will increase its dividend at 4.6 percent indefinitely
MAXImum [283]

price per share of the company's stock is $53.28

Explanation:

Under dividend growth model a stock is overvalued or undervalued assuming that the firm’s expected dividends grow at a value g forever, which is subtracted from the required rate of return or k.

Therefore, the stable dividend growth model formula calculates the fair value of the stock as P =D1 / ( k – g ).

P= price per share

D1 = current dividend

k = required return

g = growth rate

P= $3.41 ÷ (11 %  - 4.6% ) =( 3.41 ÷ 0.064 )=  $53.28

P= $3.41 ÷ (0.11  - 0.046 ) =( 3.41 ÷ 0.064 )=  $53.28

6 0
3 years ago
All manufacturing costs are assigned to units of product and all non-manufacturing costs are treated as period cost under______c
sp2606 [1]

Answer:

absorption

Explanation:

Manufacturing cost can be regarded as the summation of the cost of consumed resources during the production of a product. It can be divided into

direct materials cost

✓ direct labor cost

✓ manufacturing overhead.

It should be noted that All manufacturing costs are assigned to units of product and all non-manufacturing costs are treated as period cost under absorption costing.

3 0
2 years ago
A full-page, fully paid spread in the new york times publicizing a major oil company is best described as ________.
pickupchik [31]

scol usne jab js dj jd. jd

6 0
3 years ago
The ______________ hypothesis states that intelligent people show weaker neural activations in a smaller number of areas than le
PilotLPTM [1.2K]
Neural efficiency hypothesis
7 0
2 years ago
Other questions:
  • Using the information below, calculate gross profit for the period:    Beginning Raw Materials Inventory$25,000 Ending Raw Mater
    12·1 answer
  • A stock pays a constant annual dividend and sells for $31.11 a share. if the dividend yield of this stock is 9 percent, what is
    5·1 answer
  • In a large corporation, shareholders responsibilities include ________.
    7·1 answer
  • What are the three legal forms of business organization? What are their advantages and disadvantages?
    13·1 answer
  • What is 1,000 yen in the usa
    15·1 answer
  • When projecting the balance sheet, what happens when the initial balance sheet yields estimated total assets greater than the su
    10·1 answer
  • One of the great dangers in allocating common fixed Blank 1 of 1 costs is that such allocations can make a product line look les
    5·1 answer
  • The $1,000 face value ABC bond has a coupon rate of 10%, with interest paid annually, and matures in 3 years. If the bond is pri
    13·1 answer
  • A temporary 0% APR is a good way to attract new credit card customers. This type of APR is known as:
    9·1 answer
  • Choose a real or made up example of a company, and describe at least three variable costs the company has.
    9·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!