Solution-What was the company residual income last year

What was the company residual income last year

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Reference no: EM132123233

Accounting Question - Financial data for Joel de Paris, Inc, for last year follows

Joel de Paris, Inc Balance Sheet
	Beginning Balance	Ending Balance
Assets
Cash	$125,000	$133,000
Accounts receivable	348,000	483,000
Inventory	573,000	476,000
Plant and equipment, net	834,000	828,000
Investment in Buisson S.A	391,000	429,000
Land (undeveloped)	254,000	246,000
Total assets	$2,525,000	$2,595,000
Liabilities and Stockholders' Equity
Accounts payable	$382,000	$336,000
Long-term debt	1,011,000	1,011,000
Stockholders' equity	1,132,000	1,248,000
Total liabilities and stockholders' equity	$2,525,000	$2,595,000

Income Statement
Sales		$5,130,000
Operating expenses		4,514,400
Net operating income		615,600
Interest and taxes:
Interest expense	$124,000
Tax expense	203,000	327,000
Net income		$288,600

The company paid dividends of $28,860 last year. The "Investment in Buisson, S.A," on the balance sheet represents an investment in the stock of another company.

Requirement 1 - Compute the company's margin, turnover, and return on investment (ROI) for last year.

Requirement 2 - The board of directors of Joel de Paris, Inc, has set a minimum required return of 18%. What was the company's residual income last year?

Reference no: EM132123233

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What was the company residual income last year

Reference no: EM132123233

Reference no: EM132123233

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