Forchen, Inc., provided the following information for two of its
divisions for last year:
Small...
Forchen, Inc., provided the following information for two of its
divisions for last year:
Small Appliances
Division
Cleaning Products
Division
Sales
$34,630,000
$31,340,000
Operating income
2,346,100
1,252,900
Operating assets, January 1
6,399,000
5,770,000
Operating assets, December 31
7,590,000
6,380,000
Forchen, Inc., requires an 9 percent minimum rate of return.
Required:
1. Calculate residual income for the Small
Appliances Division.
$
2. Calculate residual income for the Cleaning
Products Division.
$
3. What if the
minimum required rate of return...
Calculating Residual Income
Forchen, Inc., provided the following information for two of its
divisions for last...
Calculating Residual Income
Forchen, Inc., provided the following information for two of its
divisions for last year:
Small Appliances
Division
Cleaning Products
Division
Sales
$34,610,000
$31,300,000
Operating income
2,619,700
1,252,300
Operating assets, January 1
6,395,000
5,740,000
Operating assets, December 31
7,520,000
7,000,000
Forchen, Inc., requires an 7 percent minimum rate of return.
Required:
1. Calculate residual income for the Small
Appliances Division.
$
2. Calculate residual income for the Cleaning
Products Division.
$
3. What if the
minimum required...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
135,000
$
131,000
Accounts receivable
336,000
489,000
Inventory
577,000
489,000
Plant and equipment, net
842,000
821,000
Investment in Buisson, S.A.
407,000
427,000
Land (undeveloped)
246,000
255,000
Total assets
$
2,543,000
$
2,612,000
Liabilities and Stockholders'
Equity
Accounts payable
$
375,000
$
330,000
Long-term debt
976,000
976,000
Stockholders' equity
1,192,000
1,306,000
Total liabilities and stockholders' equity
$...
The following information is available for our company for the
current year:
operating income, $75,000;
average...
The following information is available for our company for the
current year:
operating income, $75,000;
average total assets, $500,000;
net sales, $750,000; and
required rate of return, 12%.
Calculate the profit margin to two decimal places.
A) 6.67%
B) 10.00%
C) 15.00%
D) 16.67%
The following information is available for our company for the
current year:
operating income, $75,000;
average total assets, $500,000;
net sales, $750,000; and
required rate of return, 12%.
Calculate the asset turnover to two decimal places....
Calculating Residual Income
East Mullett Manufacturing earned operating income last year as
shown in the following...
Calculating Residual Income
East Mullett Manufacturing earned operating income last year as
shown in the following income statement:
Sales
$531,250
Cost of goods sold
280,000
Gross margin
$251,250
Selling and administrative expense
183,200
Operating income
$68,050
Less: Income taxes (@ 40%)
27,220
Net income
$40,830
At the beginning of the year, the value of operating assets was
$390,000. At the end of the year, the value of operating assets was
$460,000. East Mullett requires a minimum rate of return of...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
127,000
$
128,000
Accounts receivable
333,000
482,000
Inventory
578,000
482,000
Plant and equipment, net
892,000
878,000
Investment in Buisson, S.A.
395,000
426,000
Land (undeveloped)
251,000
247,000
Total assets
$
2,576,000
$
2,643,000
Liabilities and Stockholders'
Equity
Accounts payable
$
371,000
$
343,000
Long-term debt
1,020,000
1,020,000
Stockholders' equity
1,185,000
1,280,000
Total liabilities and stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
133,000
$
131,000
Accounts receivable
342,000
480,000
Inventory
575,000
471,000
Plant and equipment, net
790,000
798,000
Investment in Buisson, S.A.
391,000
435,000
Land (undeveloped)
253,000
255,000
Total assets
$
2,484,000
$
2,570,000
Liabilities
and Stockholders' Equity
Accounts payable
$
389,000
$
334,000
Long-term debt
951,000
951,000
Stockholders' equity
1,144,000
1,285,000
Total liabilities and
stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc. Balance...
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance
Assets Cash $ 137,000 $ 139,000 Accounts receivable 345,000 489,000
Inventory 572,000 481,000 Plant and equipment, net 816,000 801,000
Investment in Buisson, S.A. 409,000 431,000 Land (undeveloped)
254,000 249,000 Total assets $ 2,533,000 $ 2,590,000 Liabilities
and Stockholders' Equity Accounts payable $ 375,000 $ 338,000
Long-term debt 992,000 992,000 Stockholders' equity 1,166,000
1,260,000 Total liabilities and stockholders' equity $...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance
Ending
Balance
Assets
Cash
$
132,000
$
138,000
Accounts receivable
333,000
477,000
Inventory
562,000
479,000
Plant and equipment, net
873,000
846,000
Investment in Buisson, S.A.
410,000
430,000
Land (undeveloped)
251,000
255,000
Total assets
$
2,561,000
$
2,625,000
Liabilities and Stockholders'
Equity
Accounts payable
$
383,000
$
340,000
Long-term debt
989,000
989,000
Stockholders' equity
1,189,000
1,296,000
Total liabilities and stockholders' equity
$...
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
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
$
128,000
Accounts receivable
339,000
489,000
Inventory
561,000
474,000
Plant and equipment, net
870,000
859,000
Investment in Buisson, S.A.
393,000
432,000
Land (undeveloped)
254,000
253,000
Total assets
$
2,557,000
$
2,635,000
Liabilities and Stockholders'
Equity
Accounts payable
$
389,000
$
332,000
Long-term debt
1,018,000
1,018,000
Stockholders' equity
1,150,000
1,285,000
Total liabilities and stockholders' equity
$...