What was the company residual income last year

Assignment Help Accounting Basics

Reference no: EM131690001

Problem - Return on Investment (ROI) end Residual Income

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	$133,000
Accounts receivable	334,000	471,000
Inventory	573,000	473,000
Plant and equipment, net	873,000	883,000
Investment in Buisson, S.A.	396,000	428,000
Land (undeveloped)	253,000	250,000
Total assets	$2,569,000	$2,638,000
Liabilities and Stockholders' Eqvity
Accounts payable	$374,000	$347,000
Long-tea debt	1,014,000	1,011,000
Stockholders' equity	1,181,000	1,277,000
Total liabilities and stockholders' equity	$2,569,000	$2,638,000

Joel de paris, Inc. Income Statement
Sales		$4,268,000
Operating expenses		3,499,760
Net operating income		768,240
Interest and taxes:
Interest expense	$129,000
Tax expense	208,000	337,000
Net income		$431,240

The company paid dividends of $335,240 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

3. What was the company's residual income last year?

Reference no: EM131690001

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