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Discuss the distinguishing characteristics of general long-term liabilities and how they are reported. Using the same financial statements referenced in your Week Two discussion (or different organizations, if desired) provide two examples of general long-term liabilities and two examples of other long-term liabilities you found on the entities’ financial statements. Include any specific provisions or characteristics noted about each example

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Elin Hessel
Elin HesselLv2
28 Sep 2019

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Related questions

Rent and insurance payments are examples of

A.

variable expenses.
B.

fixed expenses.
C.

long-term liabilities.
D.

short-term liabilities.

Matthew is concerned about his ability to save money regularlyand has prepared a budget. Which of the following budgetclassifications would be most appropriate for Matthew'sbudget?

A.

Savings as a fixed expenditure
B.

Saving whatever may be left over
C.

Savings as a variable expenditure

Question 3

A successful financial plan includes

A.

explicitly stated financial goals.
B.

specified values that underlie the plan.
C.

all of these.
D.

logical and consistent financial strategies.

Question 4

A cash-flow statement is also known as a(n) ____ statement.

A.

taxable income
B.

net worth
C.

income and expense
D.

asset-and-liability

Question 5

A long-term goal is one that is projected to be acheived beyondhow much time?

A.

five year
B.

ten years
C.

six months
D.

one year

Question 6

A balance sheet includes ____, ____, and ____.

A.

income; expenses; net worth
B.

assets; expenses; liabilities
C.

income; liabilities; net worth
D.

assets; liabilities; net worth

Question 7

Disposable income is income

A.

after all employer withholding including taxes.
B.

minus fixed expenditures.
C.

before taxes.
D.

after all employer withholding except taxes.

Question 8

Which of the following would be classified as a long-termliability?

A.

Education loan balance
B.

Credit card debt
C.

Bank card debt
D.

All of these

Question 9

Stephen Scott's monthly pay stub indicates that his monthlygross income is $3,800. However, $800 is withheld for income andSocial Security taxes, $200 is withheld for his health anddisability insurance, and another $200 is contributed to hispension plan. How much is Stephen's disposable income?

A.

$2,800
B.

$3,000
C.

$2,600
D.

$3,800

Question 10

Which of the following provides information about a person'sfinancial condition at a specific point in time?

A.

Federal tax return
B.

Balance sheet
C.

All of these
D.

Income and expense statement

Question 11

The two most useful financial statements are ____ and____.

A.

federal tax returns; income and expense statements
B.

balance sheets; wills
C.

cash-flow statements; balance sheets
D.

wills; federal tax returns

Question 12

Which of the following is the best example of awell-stated financial goal?

A.

Pay off your credit cards as soon as possible
B.

Purchase a three-bedroom home in five years
C.

Buy a $3,000 computer in 18 months
D.

Buy a $2,000 stereo

Question 13

The first step in the budgeting process is

A.

setting financial goals.
B.

evaluating.
C.

organizing.
D.

decision making.

Question 13

The first step in the budgeting process is

A.

setting financial goals.
B.

evaluating.
C.

organizing.
D.

decision making.

Which of the following is a characteristic of a cash-flowstatement?

A.

It shows if you were able to live within your income for theperiod covered.
B.

All of these.
C.

It covers a period of time, usually one month or one year.
D.

The statement includes three sections: income, expenses, andsurplus (or deficit).

Question 15

The formula for calculating net worth is

A.

income minus liabilities.
B.

assets minus expenses.
C.

income minus expenses.
D.

assets minus liabilities.

Question 16

Food, clothing, and entertainment are examples of

A.

long-term liabilities.
B.

short-term liabilities.
C.

fixed expenses.
D.

variable expenses.

Question 17

To construct a balance sheet, you need to compile dollar valuesfor your assets and liabilities. Good sources from which to beginare

A.

checkbook or savings account records.
B.

all of these.
C.

investments.
D.

receipts of various payments.

Question 18

Discretionary income is used to pay for things like

A.

housing.
B.

vacations.
C.

utilities.
D.

food.

Question 19

A short-term goal is one that is projected to be acheived withinhow much time?

A.

one month
B.

three months
C.

one year
D.

five years

Question 20

The advantages of having organized financial records include

A.

helping you take advantage of all available tax deductions.
B.

all of these.
C.

enabling you to review the results of financialtransactions.
D.

helping you save money as well as make money.

Hands-On Project 10-12

IMPROVING DECISION MAKING: USING SPREADSHEET SOFTWARE TO ANALYZEA DOT- COM BUSINESS

Software skills: Spreadsheet downloading, formatting, andformulas

Business skills: Financial statement analysis 10- 12

Pick one e- commerce company on the Internet— for example,Ashford, Buy. com, Yahoo, or Priceline. Study the Web pages thatdescribe the company and explain its purpose and structure. Use theWeb to find articles that comment on the company. Then visit theSecurities and Exchange Commission’s Web site at www. sec.gov to access the company’s 10- K ( annual report) formshowing income statements and balance sheets. Select only thesections of the 10- K form containing the desired portions offinancial statements that you need to examine, and download theminto your spreadsheet. Instructions below provide more detailedinstructions on how to download this 10- K data into a spreadsheetand information on financial statements. Create simplifiedspreadsheets of the company’s balance sheets and income statementsfor the past three years.

• Is the company a dot- com success, borderline business, orfailure? What information provides the basis of your decision? Why?When answering these questions, pay special attention to thecompany’s three- year trends in revenues, costs of sales, grossmargins, operating expenses, and net margins.

• Prepare a PowerPoint overhead presentation (with a minimum offive slides), including appropriate spreadsheets or charts, andpresent your work to your professor and classmates. An examplePowerPoint slide presentation is attached for your review in thislearning module folder in Blackboard.

As needed: Students can find material on understanding financialstatements on financial Web sites such as Ameritrade(www.ameritrade.com) or the Small Business Knowledge Basehttp://www.bizmove.com/finance/m3b2.htm.

Downloading the Data into a Spreadsheet

Use the Convert Text to Columns Wizard in your spreadsheetsoftware to arrange the 10-K data you downloaded into spreadsheetcolumns and rows. From the Excel menu, select Data and then selectthe Text to Columns option. The software brings up a Wizard toconvert the imported text into spreadsheet columns. Although youcan decide to create line breaks, it may be easiest to accept thedefault settings (Fixed Width, General format) and then adjustcolumn widths after the Wizard has arranged the data in spreadsheetcolumns.

Financial Statements

Financial statements are used to evaluate the performance of abusiness and diagnose its strengths and weaknesses. The two primaryfinancial statements are income statements and balance sheets. Theincome statement, also called an operating statement or profit andloss statement, shows the income and expenses of a firm over aperiod of time, such as a year, a quarter, or a month. Gross profitis calculated by subtracting the cost of goods sold from revenues,or sales. The gross margin is calculated by dividing gross profitby revenues (or sales). Net profit (or loss) is calculated bysubtracting all other expenses, including operating expenses andincome taxes from gross profit. Operating expenses are all businesscosts (such as expenditures for sales and marketing, general andadministrative expenditures, and depreciation) other than thoseincluded in the cost of goods sold. Net margins arecalculated by dividing net profit (or loss) by revenues (orsales).

A balance sheet provides a snapshot of a company’s financialassets and liabilities on a given date, usually the close of anaccounting period. It lists what material andintangible assets the business owns and what money the businessowes either to its creditors (liabilities) or to its owners(shareholders’ equity, also known as net worth). At any given timea business’s assets equals the sum of its liabilities plus its networth. Current assets include cash, securities, accountsreceivable, or other investments that are likely to be convertedinto cash within one year. Liabilities are outstanding obligationsof the firm. Current liabilities are debts that are due within oneyear. Long-term debt consists of liabilities that are not due untilafter a year or more. If too much debt has been used to finance thefirm’s operations, problems may arise in meeting future interestpayments and repaying outstanding loans. By examining a series ofbalance sheets, one can identify and analyze trends in thefinancial strength of a business.

GOOGLE: Morningstar® Document Research FORM 10-K GENERAL MILLS INC - GIS Filed: June 29, 2017 (period: May 28, 2017) Annual report with a comprehensive overview of the company​ FOR THE ANNUAL REPORT

Instructions: Use the financial statements from the annual report for the year ended 5/28/2017 for General Mills. The Annual Report is on MOODLE. Answer the questions after each question. Use a different font to distinguish your answer from the question. All answers should be in your own words. Do not cut and paste from the annual report. Answers will be graded for content and written communication skills. Use complete sentences.

*****MAKE A NOTATION HERE IF THE DOLLAR AMOUNTS ARE STATED IN MILLIONS.

1. Who are the external auditors for General Mills? What does their Report of Independent Registered Public Accounting firm indicate about the amounts represented in the company’s financial statements?

2. What specific title does General Mills use for its income statement? What type of income
statement does General Mills issue? (multi-step, single–step, or condensed multi-step)
Explain.

3. Did they disclose EPS as discussed in class? Explain. What about the EPS presentation
did we not discuss in ACC 3100?

4. How does General Mills define Cash Equivalents? Is this consistent with the textbook?

5. What is the amount of cash and cash equivalents reported for the year ended at May 28, 2017 and for the year ended at May 29, 2016. By how much has cash and cash equivalents increased/decreased? Show calculations.

6. Create a table illustrating the amount General Mills reports for net cash flows from operating, investing, and financing activities in its statement of cash flow for the year ended May 28, 2017. (Note: Include any effect of exchange rates on cash.) Show calculations. Compare your answers to question 5.


7. What amount is the balance in the Allowance for Doubtful Accounts at 5/28/2017? How is the estimate for Allowance for Doubtful Accounts determined?

8. What was the gross balance of trade receivables at 5/28/2017? What was the dollar amount of bad debt expense for the year ended 5/28/2017? How many accounts were written off (Dollar amount)?

9. What inventory method is used to value inventory in and out of the US?

10. What is the balance of their LIFO reserve account 5/28/2017?

11. What impact (dollar amount and increase or decrease) did the LIFO Reserve adjustment have on Cost of Goods Sold?

12. Which depreciation method(s) is used for PP& E? What estimates are made for the useful life of the different categories of assets?

13. What was total depreciation and amortization expense fiscal year ended 5/28/2017? Where were these amounts reported in the financial statements?

14. What was the major component of total PP&E? What was its amount and what percentage was it of the total for the year ended 5/28/2017?

15. What percentage of total PP&E has been depreciated as of 5/28/2017?

16. Did General Mills capitalize any interest in the fiscal year ended 5/28/2017? If so, what was the amount?

17. Did General Mills dispose of any property and equipment during the year ended 5/28/2017? If so, what was the cash proceeds?

18. Did General Mills issue more new long term debt than they paid in long term debt payments for the year ended 5/28/2017? Explain, show amounts.

19. Create a table to show the components of Comprehensive Income that was attributable to General Mills for the year ending 5/28/2107?

20. Create a table to show the components and amounts of General Mills’ Accumulated Other Comprehensive income(loss) for the year ending 5/28/2017 and 5/29/2016?

21. When does General Mills review impairment for long-lived assets? What is their measurement of an impairment loss based on for long-lived assets?

22. What is the amount of General Mills goodwill? Did General Mills have an impairment loss on Goodwill during fiscal year ended 5/28/2017? What are the standards for testing goodwill(How often and how is it tested)?

23. List any other indefinite life intangibles? How much was the impairment loss General Mills recorded for fiscal year ending 5/31/2015 and why was impairment indicated?

24. The Financial Accounting Standards Board (FASB) issued two new accounting requirements in 2017 that were mentioned in General Mills’ annual report? What are the standards and what is the expected impact of these new standards to the financial statements?

25. General Mills uses the three-level fair value hierarchy for disclosure. What level are the majority of their assets and liabilities measured at 5/28/2017? According to your textbook, how is this level defined?

26. When does General Mills recognize revenue? Do they handle consistently with the material presented in ACC 3100?

27. What was General Mills’ current ratio and working capital as of 5/28/2017? Show calculations.

28. Is the Statement of Changes in Stockholder’s Equity (Consolidated Statements of Total Equity, and Redeemable Interest) consistent with what we learned in class? Explain-indicate similarities and differences.

29. According to the MD&A (begins on p. 15) did General Mills’ Selling, general, and
administration expenses increase or decrease in fiscal year ended 5/28/2017? What was
the primary reason for the change?

30. In two detailed paragraphs, indicate a couple of interesting items you learned while
reading this annual report.

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