dents Home Chapter 11 Homework Proble x+ pter 11 Homework Problems Financial dat
ID: 2340778 • Letter: D
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dents Home Chapter 11 Homework Proble x+ pter 11 Homework Problems Financial data for Joel de Paris, Inc., for last year follow Joel de Paris, t Deginning Ending 134,0DD 125,0 .000 331,000 569,DD0 826,000 DD12, Ieventory Plant and equipneat, net Land (undeveloped Total anseta 254.00? 247,000 Liabiiities and Stockholders Equity Accounte payable Long-tern debt sLookhoiders' egaity Total liabilities and stockholders eqaity 2,513,DD 2,575,000 38,DD 349,000 2.513,0D $2,575,000 046,00 .046.000 4,522,000 Operating expensers 15.000 Tax expense The company paid dividends of $400160 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%, 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 und "Margin",-Turnover" and "Ror to 2 decimal places 3. What was the company's residual income last year? Prev 3 o Next>Explanation / Answer
1 Beginning operating assets = 2513000-399000-254000= $1860000 Ending operating assets = 2575000-428000-247000= $1900000 Average operating assets = (1860000+1900000)/2= $1880000 2 Margin = Net oeprating income/Sales = 812160/4512000= 18% Turnover = Sales/Average operating assets = 4512000/1880000= 2.4 ROI = Margin*Turnover = 18%*2.4 = 43.2% 3 Residual income = 812160-(1880000*15%)= $530160
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