Joel de Paris, Inc.
Balance Sheet |
| Beginning
Balance | | Ending
Balance |
| Assets |
| Cash | $ | 131,000 | | $ | 136,000 | |
| Accounts receivable | | 333,000 | | | 483,000 | |
| Inventory | | 577,000 | | | 485,000 | |
| Plant and equipment, net | | 889,000 | | | 866,000 | |
| Investment in Buisson, S.A. | | 396,000 | | | 435,000 | |
| Land (undeveloped) | | 247,000 | | | 254,000 | |
| Total assets | $ | 2,573,000 | | $ | 2,659,000 | |
| Liabilities and Stockholders'Equity |
| Accounts payable | $ | 384,000 | | $ | 331,000 | |
| Long-term debt | | 1,021,000 | | | 1,021,000 | |
| Stockholders' equity | | 1,168,000 | | | 1,307,000 | |
| Total liabilities and stockholders' equity | $ | 2,573,000 | | $ | 2,659,000 | |
|
Joel de Paris, Inc.
Income Statement | |
| Sales | | | | | $ | 4,290,000 | |
| Operating expenses | | | | | | 3,646,500 | |
| Net operating income | | | | | | 643,500 | |
| Interest and taxes: | | | | | | | |
| Interest expense | $ | 121,000 | | | | | |
| Tax expense | | 195,000 | | | | 316,000 | |
| Net income | | | | | $ | 327,500 | |
| |
The company paid dividends of $188,500 last year. The “Investmentin Buisson, S.A.,” on the balance sheet represents an investment inthe stock of another company. The company's minimum required rateof return of 15%.
Required:
1. Compute the company's average operating assets for lastyear.
2. Compute the company’s margin, turnover, and return oninvestment (ROI) for last year. (Do not round intermediatecalculations and round your final answers to 2 decimalplaces.)
3. What was the company’s residual income last year?
