ACC 312 Study Guide - Midterm Guide: Cash Flow Statement

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29 Nov 2017

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Between them, the balance sheet and profit and loss account show a company"s financial position at the beginning and at the end of an accounting period and how the profit or loss has been achieved during that period. The cash flow statement goes further in answering the questions like: The aim of the cash flow statement is to summarise the cash inflows and outflows and calculate the net change in the cash position for the company throughout the period. It should also tell us about the assets held by the company, the proportion of current assets and the extent to which they may be used to meet current obligations. An element of caution should be noted in analysing balance sheet information. It may have looked entirely different six months or a year ago, or even one week ago. There is not always consistency between the information included in one (cid:272)o(cid:373)pa(cid:374)y"s (cid:271)ala(cid:374)(cid:272)e sheet with that of a(cid:374)other (cid:272)o(cid:373)pa(cid:374)y.

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GOOGLE: MorningstarÂ® 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 companyâ 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 companyâs 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, singleâstep, 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 Millsâ 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 Millsâ 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 Millsâ current ratio and working capital as of 5/28/2017? Show calculations.

28. Is the Statement of Changes in Stockholderâs 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 Millsâ 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.

harlequinbat245

The Homer Double Glazing Company plc's balance sheets asat 31 December 19-1 and 19-2, and the

profit and loss account for the year to 31 December 19-2 are asfollows:

as at 31 December 19-2

Â£000

as at 31 December 19-1

Â£000

Â£000 Fixed assets:

Freehold property at valuation 1,000 850

Plant and machinery at cost 780 695

less provision for depreciation 320 460 280 415

Motor vehicles at cost 400 332

less provision for depreciation 185 215 170 162

Office computer equipment at cost 60 55

less provision for depreciation 30 30 28 27

1,705 1,454

Current assets:

Stocks 250 222

Debtors 102 107

Short term investments 300 -

Cash at bank 54 75

706 404

Creditors: amounts due within one year

Trade creditors (45) ( 68 )

Taxation (140) (86)

Proposed dividends (120) (100)

Net current assets 401 150

Total assets less current liabilities 2,106 1,604

Creditors: amounts falling due

after more than one year

10% Debenture stock (100) (150)

2,006 1,454

Capital and reserves

Issued share capital 1,000 600

Share premium 30 210

Freehold property revaluation reserve 150 -

Asset replacement reserve 250 200

General reserve 400 300

Retained profit 176 144

2,006 1,454

Profit and loss account (extract) for the year to 31 December19-2

Â£000 Â£000

Profit before tax 494

Taxation (132)

Profit after tax 362

Transfer to asset replacement reserve ( 50 )

Transfer to general reserve (100)

Dividends paid and proposed (180) (330)

Retained profit for the year 32

Retained profit brought forward from 31 December 19-1 144

176

Notes

1. During the year to 31 December 19-2 the followingtransactions took place:

(i) Plant and machinery which cost Â£120,000 and on whichdepreciation of Â£95,000 had been provided,

was sold for Â£22,000

(ii) Motor vehicles which had cost Â£85,000 and which had awritten down value of Â£15,000 at the

date of sale were sold for Â£28,000.

(iii) Office computer equipment which had cost Â£10,000 and onwhich depredation of Â£5,000 had

been provided was sold at a loss of Â£2,000.

2. During the year to 31 December 19-2 a bonus issue of shareswas made on the basis of one

bonus share for every three shares already held. This was doneby using part of the share

premium account. The company then made a rights issue on thebasis of one share for each four

held, the new shares being offered at a premium of 10p on eachshare.

3 There had been no additions to freehold property during theyear to 31 December 19-2.

4. The 10% debenture stock is redeemable at par. The debenturestock redemption took place on 1

January 19-2

5. The short term investments are immediately realisable.

Required

A cash flow statement for the year to 31 December 19-2 for TheHomer Double Glazing Company

plc.

mauvetoad625

The Homer Double Glazing Company plc's balance sheets asat 31 December 19-1 and 19-2, and the profit andloss account for the year to 31 December 19-2 are asfollows:

	as at 31 December 19-2 Â£000 Â£000		as at 31 December 19-1 Â£000 Â£000
Fixedassets:
Freehold property atvaluation		1,000		850
Plant and machinery atcost	780		695
less provision fordepreciation	320	460	280	415
Motor vehicles atcost	400		332
less provision fordepreciation	185	215	170	162
Office computer equipment atcost	60		55
less provision fordepreciation	30	30	28	27
		1,705		1,454
Current assets:
Stocks	250		222
Debtors	102		107
Short terminvestments	300		-
Cash at bank	54		75
	706		404
Creditors: amounts due withinone year
Trade creditors	(45)		(⁶⁸)
Taxation	(140)		(86)
Proposeddividends	(120)		(100)
Net currentassets		401		150
Total assets less currentliabilities		2,106		1,604
Creditors: amounts fallingdue after more than one year
10% Debenturestock		(100)		(150)
		2,006		1,454
Capital andreserves
Issued sharecapital		1,000		600
Share premium		30		210
Freehold property revaluationreserve		150		-
Asset replacementreserve		250		200
General reserve		400		300
Retained profit		176		144
		2,006		1,454

Profit and loss account (extract) forthe year to 31 December 19-2

	Â£000	Â£000
Profit beforetax		494
Taxation		(132)
Profit after tax		362
Transfer to asset replacementreserve	(⁵⁰)
Transfer to generalreserve	(100)
Dividends paid andproposed	(180)	(330)
Retained profit for theyear		32
Retained profit broughtforward from 31 December 19-1		144
		176

Notes

1. During the year to 31 December 19-2the following transactions tookplace:

Plant and machinery which cost Â£120,000 and on whichdepreciation of Â£95,000 had been provided, wassold for Â£22,000

Motor vehicles which had cost Â£85,000 and which had awritten down value of Â£15,000 at the date of salewere sold for Â£28,000.

(iii) Office computer equipment whichhad cost Â£10,000 and on which depredation of Â£5,000 had beenprovided was sold at a loss of Â£2,000.

2. During the year to 31 December19-2 a bonus issue of shares was made on the basis of one bonusshare for every three shares already held. This was done by usingpart of the share premium account. The company then made a rightsissue on the basis of one share for each four held, the new sharesbeing offered at a premium of 10p on each share.

3 There had been no additions to freehold property during theyear to 31 December 19-2.

The 10% debenture stock is redeemable at par. The debenturestock redemption took place on 1 January 19-2

The short term investments are immediately realisable.Required

A cash flow statement for the year to 31 December 19-2 for TheHomer Double Glazing Company plc.

oliveyak893

ACC 312 Study Guide - Midterm Guide: Cash Flow Statement

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