SHARE HOLERS\' EQUIT Y BALANCE SHEET ABOVE The firm’s income tax rate is 35%. Th
ID: 2513940 • Letter: S
Question
SHARE HOLERS' EQUITY
BALANCE SHEET ABOVE
The firm’s income tax rate is 35%. The firm reported $15 million in interest income and $98 million in interest expense for 2012. Sales revenue was $3,726 million. A). Reformulate the balance sheet for 2012 in a way that distinguishes operating and financing activities. Also reformulate the equity statement. B). Prepare a reformulated statement of comprehensive income.
Balance, end of fiscal year 2011 1,430 Share issues 822 Repurchase of 24 million shares (720) Cash dividend (180) Unrealized gain on debt investments 50 Net Income 468 Balance, end of fiscal year 2012 1,870Explanation / Answer
Solution:
a) Reformulating the Balance Sheet for 2012 in a way that distinguishes operating and financing activities. Also reformulating the equity statement:
Reformulated Balance Sheet:
Reformulated Equity Statement:
b) Preparing a Reformulated Statement of Comprehensive Income:
Operating Cash $60 Accounts Receivable $940 Inventory $910 Property and Plant $2,840 Operating Assets $4,750 Operating Liabilities: Accounts Payable $1,200 Accrued Expenses $390 $1,590 Net Operating Assets $3,160 Net Financial Obligations: Short Terrm Investments ($550) Long Term Debt $1,840 $1,290 Common Shareholders Equity $1,870Related Questions
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